My Books are a Mess. What do I do?

You've hit the ground running with your production company. Now that the end of the year is approaching, your tax accountant is asking for your 2022 financial statements. But you don't have any—or maybe you do, but they're a certified disaster zone! You've got a bank account, you've got customers, and you've got income. You just need to figure out how to get organized with your books. Follow these steps to bring your books up to date in time for your tax filing.

 Find help in accounting software

With minimal activity for the year, you may be able to just give your accountant your business's bank statements. However, if you've generated a decent amount of activity, you'll need bookkeeping software.

QuickBooks Online and Xero are common software solutions that accountants typically know how to use. They offer preset categories as well as custom options, which you'll choose—usually as advised by your tax accountant—depending on your business activity.

Reconcile your bank activity

Next, ensure that the business activities in your accounting system match the transactions on your bank statement—at least monthly. If you've been keeping a set of books but haven't been performing bank reconciliations, do so now! It's the only way to verify your accounting activity.

After you've performed these reconciliations, quickly review them for any outstanding items that may have been entered erroneously and need to be voided or deleted (i.e., entries in your accounting system that haven't yet hit the bank). You should perform this for each month of activity and continually with both your bank and credit card accounts.

 Record any outstanding bills or customer invoices

If you haven't yet paid certain bills or collected on certain invoices, record those in your accounting system right away. Depending on whether you're filing taxes on a cash or accrual basis, these outstanding items might not appear in your numbers for the year, but keeping your payables and receivables up to date is a great way to track your outstanding billers and collections.

By completing these three steps for the full period (i.e., a fiscal year, in the case of tax filing), you should be able to generate a profit & loss (P&L) report, a balance sheet, and a trial balance for your tax accountant to use in the course of filing. If you need any support, Syzygy can clean up or reconstruct your books based on historical activity and even answer your tax accountant's confusing questions! To hear more about this service as the year comes to a close, contact Syzygy today.