DIY Bookkeeping Requirements

As you are aware, the IRS and state tax agencies are all scrutinizing the tax preparation process more and more in an effort to increase their revenues and maximize compliance. The IRS is now requiring preparers to provide more assurances and confirmation of the information necessary to prepare business and self-employed tax returns. This has caused us to have to revise some of our policies for information required to prepare an accurate tax return for you.

If you use QuickBooks as your accounting software, please do not send us a copy of your database file.

If you manage your own bookkeeping, please make sure that they following steps have been completed prior to sending us your financial records.

1. Must use Walton CPA standardized chart of account.
2. All bank statements must be reconciled on a monthly basis.
3. All loan accounts must be recorded and reconciled on a monthly basis.
4. Credit card transactions must be entered and coded individually based on the month of the transaction and the statements must be reconciled on a monthly basis.
5. Checking and credit card use must be through separate business accounts with little or no comingling of personal use.
6. Prior year balance sheet account balances must match the tax return from the prior year.
7. Accounts payable and accounts receivable balances must be zero on the cash basis at the end of the year.
8. Fixed assets and items to be depreciated should be properly recorded in an asset account.
9. S-corporations must formally process and record officer payroll to indicate reasonable compensation.
10. Payroll taxes and wages must match W2s and 941s produced for the year (if applicable).
11. Distributions or draws should be accumulated in an equity account.
12. Inventory must be adjusted on a quarterly basis (if your business holds inventory).

We also offer year-round bookkeeping service packages to ease this burden and allow you to focus on growing your business. We work with small businesses like yours every day. If you would like more information, please let us know.