Posted on: November 17, 2022 by Huntersure
There are multiple things accountants must do before the year ends to balance the books properly. Avoid accountants professional liability issues with careful year-end preparation. The sooner you prepare for year-end, the easier the process will be.
Creating a checklist may even help you keep everything in order.
It is currently the best time to evaluate your professional liability insurance. Not only should you ensure that you have enough coverage, but you should also ensure that you get the best rates.
Financial statements are critical for year-end assessments.
Financial statements provide necessary information to evaluate the year’s performance and forecast the following year’s expectations. Minimize your risk of accountants professional liability claims by ensuring comprehensive, accurate statements.
Accounts receivable should be as close to empty as possible at year-end. Aging accounts indicate delays with cash receipts, which can be a concern. Identify any accounts that need more aggressive collections action based on aging status.
At year-end, all inventory records should be reviewed and validated. Audit the inventory records and the values on the books to ensure accuracy in both book values and depreciation.
Gather the bank statements and take time to reconcile those with the ledger records. It ensures accuracy in the cash accounts. Reconciliation helps you reduce the risk of accountants’ professional liability exposure due to misstatements of assets.
Paperwork is necessary for internal and external audit preparation, tax support, and financial statement documentation. Organize the year’s receipts, statements, invoices, and records and store them with the final statements and ledger reports. The IRS recommends retaining statements, tax filings, receipts, and other documents for anywhere from three to seven years after filing.
The last month is an excellent time to take notice of your current coverage compared to your existing business. Look at the liability risks your company faces and ensure the policy you have will protect you. As your practice grows, your liability exposures will change. Update your policy accordingly to ensure adequate protection at all times.
Preparation is the key to comprehensive, accurate year-end records. Your firm will be ready for year-end with the right accountants’ professional liability coverage to protect your interests and the information here.
Huntersure LLC is a full-service Managing General Agency that has provided insurance program administration for professional liability products to our partners across the United States since 2007. We specialize in providing insurance solutions for businesses of all sizes. Our program features can cover small firms (grossing $2.5 million annually) to large corporations (grossing $25 million annually or more). We make doing business with us easy with our breadth and depth of knowledge of E&O insurance, our proprietary underwriting system that allows for responsive quoting, binding and policy issuance and tailored products to meet the needs of your insureds. Give us a call at (855) 585-6255 to learn more.
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