Year-End Planning Items to Consider
Auto Dealer Alert, 2006 Volume 8


With this year’s end fast approaching, here are a few things to consider when preparing for the year-end reporting (most of these items should be done each month):

1. Fully reconcile bank and investment accounts to the general ledger.

2. Review all past due accounts receivable and write off uncollectible amounts.

3. Count and reconcile all car inventories to the general ledger.

4. Estimate LIFO and record on the December statement—contact CPA for assistance.

5. Reconcile the parts pad to the general ledger and adjust.

6. Write down used vehicles (not on LIFO) based upon a national source such as NADA, Kelly Blue Book, etc.

7. Review all schedules for unusual items such as unapplied credits or uncollected amounts.

8. Review open repair orders for old items.

9. Review prepaid assets and expense all items where appropriate.

10. Review fixed asset purchases and consider expensing small dollar items. Adjust accrued depreciation on books to the amount per depreciation lapse schedule.

11. Reconcile floor plan accounts to the general ledger.

12. Reconcile factory statements to the general ledger.

13. Record all accounts payable and accrued liabilities due as of year end. Ascertain all accrued commissions and bonuses recorded.

14. If the dealership is a C Corporation, pay any salaries, commissions, or bonuses to stockholders by December 31.

15. Pay interest on shareholder loans to and from the dealership by year end. Issue IRS Form 1099 for this interest.

16. Reconcile all equity accounts to the prior year’s beginning balances.

17. Issue IRS Form 1099-MISC to all non-employees who qualify for reporting.

18. Review dealership demo policy for compliance and taxability of benefits. Add, if any, taxable amounts to appropriate employee/officers.

19. Notify all customers for whom the dealership filed an IRS/FinCEN Form 8300.

20. Identify the amount spent on meals and entertainment during the year, not including travel and other events.

21. Make all required personal and corporate income tax deposits for the year and pay all personal state income tax by year end. Prepare a schedule of estimated taxes paid.

22. Prepare an analysis of what is included in other income and other deductions.

23. Contact legal counsel and have corporate minutes brought up to date.

Finally, we suggest that you meet with your CPA prior to year end to discuss these and other issues.