Confirm the year-end scope and final data date
Start with the legal entity, balance date, GST basis, prior-year accounts and agreed deliverables. Confirm which systems feed Xero and the latest date for bank feeds, sales platforms, payroll and inventory. Save the prior-year signed accounts and tax return because they provide opening balances and treatment history, but do not assume every prior-year classification remains correct.
Create a year-end checklist with owners and status. Separate bookkeeping completion, balance-sheet reconciliations, tax-sensitive reviews, proposed journals and reviewer queries. This prevents the annual process from becoming one long unstructured list.
Complete bank, receivables and payables work
Reconcile all bank accounts and credit cards to external statements through the balance date. Review unreconciled items and duplicate feeds. Reconcile receivables and payables to the general ledger, investigate old balances, apply credits and identify bad debts or disputed items. Confirm that customer and supplier reports are run at the correct date.
Review payment gateways and clearing accounts. Net deposits should be split between gross sales, refunds, fees and amounts still in transit. Old balances in clearing accounts often indicate missing settlements or duplicated postings and should not be rolled forward without explanation.
Reconcile tax, payroll, loans and fixed assets
Tie GST returns to the GST control accounts and myIR balances. Reconcile payroll reports to wages, PAYE, deductions, leave and bank payments. Confirm loan balances and interest with lender statements. Review fixed-asset additions, disposals and depreciation, including low-value assets and potential Investment Boost items for adviser review.
Analyse shareholder current accounts and related-party transactions. Identify expenses paid personally, funds introduced, drawings, dividends, salaries and loans. These balances often require legal and tax judgement, so provide transaction detail and supporting documents rather than only a closing total.
Review profit and loss accounts for tax-sensitive items
Scan repairs, professional fees, subscriptions, vehicles, travel, meals, entertainment, home office, donations, penalties, insurance and one-off income. Look for capital purchases coded as expenses and ordinary expenses posted to fixed assets. Review GST and private-use treatment. Compare the current year with the prior year and investigate unexpected movements.
Prepare accruals, prepayments, inventory adjustments, bad debts, depreciation and other year-end journals with clear calculations. Keep proposed journals separate until they are approved, and then confirm they have been posted to Xero.
Prepare reports, lock the period and roll forward
Generate the final trial balance, general ledger, aged receivables, aged payables, fixed-asset schedule, GST reports and financial statements. Confirm all reports agree after final journals. Use tracking categories consistently and review archived accounts or contacts that may affect reporting.
After sign-off, set lock dates appropriate to the organisation’s access structure, save final reports and record any changes made outside Xero. Roll forward recurring schedules and update monthly procedures based on year-end findings. A clean year-end should produce reliable opening balances and fewer problems in the next GST and annual accounts cycle.
Before relying on the completed file, compare the current-year output with prior periods, retain the official reports and source records used, and record every unresolved matter for the New Zealand accountant or tax adviser. This final review creates a clear audit trail, supports consistent treatment and makes the next bookkeeping, GST or annual accounts cycle faster and easier to review.
Document the close so the next year starts cleanly
Once the final adjustments are approved, document which reports were run, which accounts were reconciled, who reviewed the file and where the supporting evidence is stored. Save the final trial balance, general ledger, aged receivables, aged payables, GST reconciliation and fixed-asset report in a clearly labelled year-end folder. Recording recurring issues and their resolution also helps the bookkeeping team improve bank rules, coding guidance and monthly review procedures for the next financial year.