Everything to Know About the Year-End Financial Package

Table of Contents

What is a Year-End Financial Package?

When your books are complete and reviewed for your previous fiscal year, you’ll receive a tidy annual financial package that is IRS-compliant and ready for income tax filing. 

  • This is the point at which your data is ready for you or your tax professional to prepare your income tax return. It includes reports such as the Income Statement, Balance Sheet, General Ledger, and Trial Balance. 
  • Your bookkeeper has made all the meticulous, time-consuming adjustments the IRS requires, including adjustments for merchants, loans, and more.
  • Your Year-End Financial Package has been through multiple rounds of reviews to ensure the highest fidelity and accuracy, so you can confidently file with the IRS.

It also includes important callouts for your tax preparer, as well as a tab for them to fill out with any changes to be made to your bookkeeping after tax filing.

How do I access my Year-End Financial Package?

  1. Once logged into the app, use the left sidebar to navigate to Data and Requests -> Bookkeeping Documents.
  1. In the Processed Documents section, click on the Tax folder.
  1. Your Year-End Financial Package will be labelled as such, along with the date range of the applicable fiscal year.
  2. Download your Year-End Financials.

What if my Year-End Financial Package is not there?

If your Year-End Financial Package is not there, the best thing to do is check the status of your books on the Overview page.

If the Bookkeeping Status section shows that your input is needed for any month in the applicable fiscal year, your bookkeeping team is waiting on additional information from you in order to accurately close your books and prepare your Year-End Financials. They cannot move forward until you provide them with the requested information or inputs, as it will compromise their ability to close your books with total accuracy.

If your input is required, you can see what’s needed from you by checking your notifications in the Bench app by clicking the bell icon in the top right corner of your screen. You’ll be guided to the correct areas where your input is needed in order to complete your bookkeeping.

If the status for any month is In Progress or Books Reviewed, hold tight! Your bookkeeper is working on completing your bookkeeping, running your books through a series of quality checks, and compiling your Year-End Financials!

What is included in my Year-End Financial Package?

Your Year-End Financial Package includes the following tabs:

  • Notes and Context
  • Annual Balance Sheet
  • Annual Income Statement
  • Trial Balance
  • General Ledger
  • Journal Entries
  • Monthly Balance Sheet
  • Monthly Income Statement
  • Adjusting Journal Entries

Notes and Context

The first tab in your Year-End Financial Package includes a high-level snapshot of your business, the accounting method used for your books, and key details your tax preparer should be aware of.

Some notes are standard for certain ledgers and explain Bench's standard bookkeeping approach, while others call out situations specific to your business that your tax preparer may need to review or adjust before filing.

Balance Sheet

A Balance Sheet is a snapshot of your business's financial position at a specific point in time (for example, December 31). Unlike an Income Statement (which covers a date range), the Balance Sheet shows account balances up to and including a single day. These balances carry forward indefinitely and only change when there's activity in the account.

A Balance Sheet helps you understand what your business owns (assets), what it owes (liabilities), and what's left over for the owner(s) (equity).

Common asset ledgers include:

  • Bank accounts
  • Balance-holding merchant accounts (like payment processors)
  • Property, Plant, & Equipment (capitalized assets)
  • Money in Transit (transfers that were still in progress on the balance sheet day)
  • Loans to Shareholder (C-Corps only)

Common liability ledgers include:

  • Credit cards
  • Loans and lines of credit
  • Payroll payables (wages and/or payroll taxes owed)

Equity accounts vary by business type. The Equity section on your Balance Sheet depends on how your business is set up (Sole Proprietorship, Partner, S-Corp, C-Corp, or Non-Profit). Common equity ledgers include:

  • ‍Member Contribution (Sole Props and Partnerships) or Additional Paid in Capital (S-Corps)
    • Money the owner(s) or shareholder(s) put into the business - either as direct funding or through business expenses incurred on personal accounts.
  • Member Drawing (Sole Props and Partnerships) or Shareholder Distribution (S-Corps)
    • Money taken out of the business by the owner(s) or shareholder(s) - either as direct withdrawals, paying personal expenses with business funds, or receiving business revenue into personal accounts.
  • Dividends Paid (C-Corps only)
    • Payments the corporation has made to its shareholders from company profits.
  • Retained Earnings (Sole Props, S-Corps, C-Corps)
    • The total profits (or losses) your business has built up over time that you've kept in the business rather than paid out.
  • Member Capital (Partnerships)
    • The "net investment" in the business.
    • Member Capital increases for a partner when they contribute cash to a business or when they are allocated their share of the partnership's profits.
    • Member Capital decreases for a partner when they draw cash from a business or when they are allocated their share of the partnership's losses.

Income Statement

An Income Statement (also called a Profit & Loss statement) summarizes your business's financial performance over a specific date range (for example, January 1 to December 31). Unlike a Balance Sheet (which is a snapshot at a moment in time), the Income Statement shows the revenue you earned and the costs and expenses you incurred during that period.

An Income Statement helps you understand whether your business operated at a profit or a loss for the year.

The Income Statement is grouped into three sections: Revenue, Cost of Sales, and Expenses. At the bottom, you'll see your net profit or loss for the period (revenue minus costs and expenses).

Revenue

The Revenue section includes the income your business earned from selling products or providing services during the period. Depending on the structure of your payment processors, it may also include offsets such as refunds, discounts, and sales tax remittances that reduce your gross revenue.

Common revenue ledgers include:

  • Sales Revenue
  • Other Income
  • Interest Income
  • Sales Tax Remitted (negative)
  • Returns & Allowances (negative)

Cost of Sales

The Cost of Sales section includes the direct costs of delivering your product or service. Depending on your business, this may be tracked as Cost of Goods Sold or Cost of Service. These costs typically rise and fall with your sales activity.

Expenses

Expenses include the day-to-day costs of running your business that aren't directly tied to a specific sale. Some expense categories have unique deductibility rules, which your tax preparer will account for when filing your return.

Common expense ledgers include (but definitely aren't limited to):

  • Bank & ATM Fee Expense
  • Business Meals Expense
  • Computer Equipment Expense
  • Facility & Utilities Expense
  • Gas & Auto Expense
  • Independent Contractor Expense
  • License & Fee Expense
  • Marketing & Advertising Expense
  • Payroll Expense (salary, taxes, admin, pension, etc.)
  • Postage & Shipping Expense

Trial Balance

A Trial Balance is a simple list of all the accounts in your books (like income, expenses, bank accounts, credit cards, loans, payroll, equity) and the total balance in each one as of a specific date. In other words, it's the full list of account balances that the Income Statement and Balance Sheet are built from.

General Ledger

The General Ledger is the detailed record of all of the activity in your books.

Think of it like a transaction-by-transaction log. For each account (from your bank accounts to your loans to Sales Revenue to every expense account), it shows every debit and credit, including the date, description, and amount, and how that entry affected the account balance.

Journal Entries

The Journal Entries tab lists every single transaction in your books, including both the debits and credits that make up the journal entry, as well as the date, description, and affected accounts.

Adjusting Journal Entries

The Adjusting Journal Entries tab is for your tax preparer to complete in the event any final adjustments or revisions are made by them prior to filing your taxes. Once you return the Adjusting Journal Entries to your Bench bookkeeper, they'll enter them into the books to ensure continuity into the next fiscal year!

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