Essential End-of-Year Veterinary Bookkeeping Checklist
You may feel that 2024 has only just begun, but year-end is sneaking up quickly. Veterinary practices should focus on their financial health not only in December but also throughout the year to facilitate a smooth, painless year-end process. Veterinary bookkeepers can help with financial preparations by staying on top of basic tasks monthly or quarterly to ensure a clean and accurate financial record.
Staying on top of your financials ensures tax compliance and helps you control your business. Think of your books like a car. Regular maintenance prevents issues, but skipping oil changes or tire rotations can lead to permanent or costly damage. If you wait until December 31 to start closing procedures, you’ll miss opportunities for tax optimization and your books will be inaccurate.
At VetBooks, we know that healthy business decisions cannot be made without a complete financial picture. Here’s a checklist of the financial tasks your veterinary bookkeeper should start working on now to prepare for year-end.
- Tie to tax — Ensure the final numbers from last year’s tax return are correctly entered into this year’s books.
- Inventory counts — Establish an ongoing counting process to ensure accurate end-of-year inventory. Quarterly counts are ideal, as annual counts often prove messy and challenging. Consider using the ABC inventory strategy to prioritize tracking high-value items.
- Reconciliations — Perform monthly reconciliations of bank, credit card, and loan statements, ensuring you accurately account for loan principals and interest. Monthly reconciliations allow you to detect and correct discrepancies as they occur, rather than going back and trying to recall what happened.
- Retirement matching — Account for retirement matching or profit-sharing lump sums in the books by the end of the year, even if you plan to pay them after the year closes. Alternatively, consider switching to monthly contributions for easier tracking.
- Bonus payments — Remember—bonuses are considered employee compensation and must be accounted for as such. A cash bonus may seem a great way to surprise employees, but it can cause massive bookkeeping headaches.
- W-2 updates — Verify and update addresses on employee W-2s to avoid delays and ensure delivery of the forms.
- Write-offs — Review and reconcile accounts receivable to clear uncollectible accounts or send them to your collection’s agency. Year-end is the ideal time to write off accounts to keep the books cleaner.
Year-end accounting
If you’ve kept up with bookkeeping, you’ll be ready to meet with your CPA as the final step in year-end prep. According to Jharid Pratt, CPA, MST, CEO of Granite Peak Associates, quarterly meetings with your accountant are ideal. During the Q4 meeting, you should discuss:
- Projected tax bracket and liability
- Estimated tax payments due in January
- Election or consideration of the pass-through entity tax
- Year-end tax and large expenditure planning
- Annual report filing and the beneficial ownership information (BOI) form
- Plans for next year’s business growth
A dedicated veterinary bookkeeper can make tackling year-end financial tasks easier and ensure accurate, up-to-date financial records. For busy practice managers and owners with many other duties, a bookkeeping service like VetBooks can keep you on track and reduce costly errors.
With a complete financial picture, you can make better business decisions, and your veterinary team can focus on veterinary medicine and running the practice. Ensuring that your books tell the correct financial story will help you start the new year with confidence in your business health. For help with end-of-year tasks or year-round veterinary bookkeeping, schedule a meeting with the VetBooks team.
