Which steps are necessary before finalizing the year-end closing of books?

Completing all bank and credit card reconciliations is a critical step before finalizing the year-end closing of books. This process ensures that the financial records in the accounting system accurately reflect the company's actual cash position. By reconciling, discrepancies between the recorded transactions in the accounting software and the transactions that have cleared the bank or credit card statements can be identified and resolved.

This step is essential not only for accurate reporting but also for maintaining the integrity of the financial statements. Accurate reconciliations help to prevent errors that could lead to financial misstatements, which are crucial for both internal decision-making and external reporting to stakeholders.

Other steps, while potentially relevant to bookkeeping practices, do not specifically address the need for accurate financial representation at year-end. For example, reviewing customer invoices is important for accounts receivable management, but it does not have the same direct impact on ensuring the accuracy of the overall financial position as bank and credit card reconciliations do. Similarly, disconnecting from online service accounts and setting all projects to Active do not constitute necessary steps for closing the books, as they do not influence the integrity of the financial data being reported at year-end.