The end of the calendar year can be busy. There are the holidays, gift buying, parties, picking up people at the airport, dinners and just taking some time off.
But, it’s easy to forget that the end of year means finalizing your finances, especially if you are a small business owner and your fiscal year-end is the same as the calendar year-end.
So in this post, I’m going to run through a checklist of items to cover or have someone perform for you, so you are set for the new year, closing out the old year and tax time.
Inventory Time – Do you carry inventory in your business? If so, you will need an accurate tabulation of what you are physically carrying, even if you have electronic records. It’s possible through errors or theft that the physical totals won’t agree to your accounting records. Taking the time to physically count what is on hand gives you the ability to compare to your records and make the adjustments so everything is in agreement. Do this now so you don’t have to do this on New Year’s Eve.
- 2Account Reconciliations – Like your inventory, you want your account totals to agree to your supporting documentation. For example, does your book balance for your bank account agree with the bank’s total? If not, do you know what the difference(s) are? All of your balance sheet line items should have account recs to support the totals. Another example is your accounts receivable. If your total on the balance sheet is $10,000 what unpaid invoices are out there that total to the $10,000? How old are they? Should they be written off? Having trouble finding a receipt for that expense? Consider getting yourself an app for your phone so you can snap a quick photo for later retrieval, or have your bookkeeper start using software like Receipt Bank to help with this documentation.
Financial Statements – are your monthly financial statements up to date? If not, when was the last time they were prepared? Were they reviewed by your CPA? Have you recognized all of your revenue and expenses? Have you accrued for expenses that have occurred but not paid? You will need updated and reviewed financials for your taxes, so if you are way behind in preparing these consider hiring outside help.
- 4Payroll – The end of the year brings a lot of extra work in the payroll area. There are bonuses, profit sharing, raises, annual reviews, W-2’s, health insurance renewals for the upcoming year.
- 5Quarterly Taxes – December is also the end of the fourth quarter for most businesses and you’ll like need to prepare and submit quarterly payroll taxes, and sales and use taxes.
- 6Vendor 1099s – Did you pay a person or business more than $600 during the year? If so, you many need to send them a 1099 by January 31. It is not always easy to determine if a person or business needs to be sent a 1099. Consult with a bookkeeper or CPA if you are not sure.
- 7Filing – If you will be having your CPA review your financials and prepare your taxes, are your papers organized in nice categories? Do you have files for the new year to avoid confusion.
- 8Budget – Once you know how you did during the current year, what do you want to do next year? Do you have plans for revenue growth, employee hires, asset purchases, where will the money come from?
- 9Schedule a Meeting with Your Bookkeeper or CPA – Don’t wait too long for this, especially if you don’t have one in-house or on retainer. Year-end is extremely busy for people in those professions. Scheduling an appointment or outsourcing your bookkeeping now will keep you from scrambling to find one who is available and competent.
Presentations – Does your business present the end of the year results to its employees? If so, what information do you want to present, who will prepare it, what format will you use? Do you have last year’s powerpoint slides that you can update with the current year results?
How do you feel after reviewing the list above?
Calm and relaxed because you have everything covered? Good for you. You are a planner or likely have been through the pain before of not being ready and decided never to do that again.
Or are you even more stressed? Well, the good news is you still have some time, so don’t ruin your holidays. If you don’t think you will have enough time, resources or skill to do it all, consider hiring or outsourcing additional help.
Right now, I have openings for two additional clients and for a holiday bonus I am offering the first two months free if you sign up by December 31. I hope to hear from you.