Year-end accounting checklist for dealers
WANADA Kindred-line member, Councilor, Buchanan & Mitchell, PC, has created a useful year-end accounting checklist for dealers. Here are a few of the highlights:
1. Accounting records:
« Record December finance chargebacks.
« Keep the accounts payable journal open to record all 2017 expenses in 2016, including advertising, interest, utilities, telephone, gasoline, data processing, insurance, etc.
« If any vehicle deal is not 100% completed (all paperwork and funding in 2016), treat it as a 2017 sale.
« Make sure all miscellaneous inventories are adjusted to actual, including labor inventory, sublet, gas-oil-grease, body shop materials, etc.
« Reconcile, when possible, all balance sheet accounts before closing the year.
2. A reasonable estimate must be included of any LIFO adjustment for the year on all versions of the December financial statements. There are no exceptions!
3. Compare actual parts inventory to the accounting parts inventory and make adjustments where appropriate.
4. If there are any building repair or maintenance items that need to be done, such as painting or lot repairs, try to have them performed by the end of 2016.
5. Review current year fixed asset additions to determine if the costs should be capitalized or expensed as repairs.
6. Review all past due accounts receivable, including employee receivables. Write off those that are not collectible. If any are from former employees, issue them a Form 1099-C for the amount written off.
7. Review bank reconciliations for checks (including payroll checks more than 60 days old) that are not expected to clear. These checks should be voided and reissued.
8. All payroll tax and sales tax payable accounts must equal the actual amount of the applicable taxes paid in 2017 for the 2016 fourth quarter and year-end filings.
9. Review procedures for the use of demonstrators to ensure compliance with the current IRS regulations.
10. If there are any charitable contributions, consider making them in 2016 to receive a current year deduction. The IRS requires written acknowledgment for each contribution of $250 or more.
For the complete checklist, contact Kathy Teich at kt@wanada.org or 202-237-7200.
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