https://ledgerdock.com/blog Plain answers to month-end close questions, one question per article. en-us https://ledgerdock.com/blog/1099-threshold-2026 https://ledgerdock.com/blog/1099-threshold-2026 Thu, 12 Nov 2026 00:00:00 GMT 1099 and W-9 For payments made in 2026, the general reporting threshold for Form 1099-NEC and Form 1099-MISC is $2,000. It was $600 for payments through 2025. The first forms that use $2,000 are the ones filed in early 2027. A few kinds of payment, such as royalties, keep their own lower amounts. The amount may be adjusted for inflation from 2027, so check the IRS instructions each year. https://ledgerdock.com/blog/bank-reconciliation-off-by-small-amount https://ledgerdock.com/blog/bank-reconciliation-off-by-small-amount Thu, 12 Nov 2026 00:00:00 GMT Reconciliation A small reconciliation difference is usually one of three things: two digits swapped (the difference divides by 9), one transaction missing or entered twice (search for the exact amount), or an amount on the wrong side (search for half the difference). Check those before anything else. https://ledgerdock.com/blog/bank-transfer-recorded-twice https://ledgerdock.com/blog/bank-transfer-recorded-twice Thu, 12 Nov 2026 00:00:00 GMT Clearing accounts A transfer appears on both bank statements, so it reaches the books twice. Record each half against a transfer clearing account: the money leaving the first account debits clearing, and the money arriving in the second credits it. The clearing account returns to 0.00 and no income or expense is created. https://ledgerdock.com/blog/clearing-account-vs-suspense-account https://ledgerdock.com/blog/clearing-account-vs-suspense-account Thu, 12 Nov 2026 00:00:00 GMT Clearing accounts A clearing account is planned: it holds money between two entries you know are coming, and it returns to 0.00 when both post. A suspense account is unplanned: it holds something you cannot classify yet. One is a process. The other is an open question. https://ledgerdock.com/blog/fix-mistake-in-closed-period https://ledgerdock.com/blog/fix-mistake-in-closed-period Thu, 12 Nov 2026 00:00:00 GMT Closing the books Leave the closed period as it is. Post a correcting entry in the open period, dated today, that reverses the wrong part and records the right one, and name the original entry in the memo. Reopen the period only when nothing has been issued from it. For a prior year, talk to whoever prepared the return. https://ledgerdock.com/blog/footing-check-bank-statement-pdf https://ledgerdock.com/blog/footing-check-bank-statement-pdf Thu, 12 Nov 2026 00:00:00 GMT How it is built Use a footing check. A bank statement prints its own balances and totals, so rows pulled from it are trusted only when they add up to those printed numbers, to the cent. If they do not, the statement is marked unverified and waits for a person: it reaches the books only when it ties, or when someone records the difference with a written reason. The proof is arithmetic, not a confidence score. https://ledgerdock.com/blog/loan-payment-principal-interest-entry https://ledgerdock.com/blog/loan-payment-principal-interest-entry Thu, 12 Nov 2026 00:00:00 GMT Closing the books Split every loan payment in two. The principal part debits the loan liability and reduces what you owe. The interest part debits interest expense. The credit is cash for the full payment. Take the split from the lender's statement or the amortization schedule, never from a guess. https://ledgerdock.com/blog/merchant-deposits-do-not-match-sales https://ledgerdock.com/blog/merchant-deposits-do-not-match-sales Thu, 12 Nov 2026 00:00:00 GMT Clearing accounts Card processor deposits never equal sales because the processor pays you net: sales minus fees, refunds and chargebacks, and usually a day or two later. Record gross sales, fees and refunds from the processor's report against a merchant clearing account, and code each bank deposit to the same account. It returns to 0.00 once every payout has arrived. https://ledgerdock.com/blog/old-outstanding-checks https://ledgerdock.com/blog/old-outstanding-checks Thu, 12 Nov 2026 00:00:00 GMT Reconciliation First find out whether each old check is still owed. If the payee was paid another way, or the check was lost, void it in the current period and reverse the original expense or restore the liability. If the money is still owed and cannot be delivered, your state's unclaimed property rules may apply. https://ledgerdock.com/blog/payroll-clearing-account-not-zero https://ledgerdock.com/blog/payroll-clearing-account-not-zero Thu, 12 Nov 2026 00:00:00 GMT Clearing accounts A payroll clearing account stays off zero when the credit from the payroll entry does not equal the cash the provider actually pulled. The usual causes are net pay booked against gross, a tax draft coded elsewhere, employer taxes on one side only, timing across a month end, and fees or returned payments. https://ledgerdock.com/blog/reconciliation-beginning-balance-wrong https://ledgerdock.com/blog/reconciliation-beginning-balance-wrong Thu, 12 Nov 2026 00:00:00 GMT Reconciliation The beginning balance is the total of everything already reconciled. It changes only when a transaction from a reconciled period was edited, deleted, un-reconciled or added with an old date. Find what changed since the last reconciliation and put it back. Do not force the balance with an adjustment. https://ledgerdock.com/blog/sealing-a-ledger-hash-chain https://ledgerdock.com/blog/sealing-a-ledger-hash-chain Thu, 12 Nov 2026 00:00:00 GMT How it is built With two pieces. A hash chain seals the record of each approved batch, its totals, its list of rows and its evidence, so that record cannot be rewritten without breaking every later hash. A database trigger on the ledger rows refuses deletes, and refuses updates to the date, the accounts and the amounts, once the batch is sealed. Corrections are new entries. https://ledgerdock.com/blog/undeposited-funds-not-clearing https://ledgerdock.com/blog/undeposited-funds-not-clearing Thu, 12 Nov 2026 00:00:00 GMT Clearing accounts Undeposited Funds keeps a balance when a customer payment was received into it and the bank deposit was then recorded straight to income instead of being built from that payment. The income is counted twice and the payment never leaves the account. The fix is to make the deposit from the waiting payments. https://ledgerdock.com/blog/what-is-a-clearing-account https://ledgerdock.com/blog/what-is-a-clearing-account Thu, 12 Nov 2026 00:00:00 GMT Clearing accounts A clearing account is a temporary balance sheet account that holds money between two entries you know are coming, such as the payroll cash and the payroll report. When both sides have posted, it returns to 0.00. A balance left at period end points to the exact pair that did not meet. https://ledgerdock.com/blog/when-is-a-month-closed https://ledgerdock.com/blog/when-is-a-month-closed Thu, 12 Nov 2026 00:00:00 GMT Closing the books A month is closed when four checks pass: every bank and card account ties to its statement, no transaction is still waiting for an account, every clearing account is at 0.00, and this month's loan and depreciation entries are posted. If one fails and you close anyway, the reason belongs in writing. https://ledgerdock.com/blog/year-end-closing-entry https://ledgerdock.com/blog/year-end-closing-entry Thu, 12 Nov 2026 00:00:00 GMT Closing the books The year-end closing entry resets every income and expense account to zero and moves the year's net income into equity: retained earnings for a corporation, the owner's or partners' capital accounts otherwise. Most accounting software does it automatically. Your job is to check that equity then agrees with last year's balance sheet.