The new year is almost upon us.
As you plan for holiday festivities and family gatherings, don’t forget that there are things that you need to do for your business to wrap up the year, as well.
We’re going to discuss twelve things that you should do before December 31st. These tasks will help you set your business up for success as you enter into the new year. With these small steps, done now, the less stress you’ll face come tax season.
- Review Profit and Loss Statements
Taking the time to organize your profit and loss statements now will help you know where you are financially, entering into the new year.
This information will also help you create goals for the new year, and ensure that you’re reconciling any outstanding accounts.
Make sure to reconcile your accounts and credit cards as you review them.
- Organize Your Receipts and Calculate Your Deductibles
You could wait until April to do this, but if you do it now, you’ll be much more prepared come tax season.
It’s much easier to organize your receipts now—before you start collecting them for next year.
Put them in categories and add them up. You’ll want to have all this information ready for your accountant. Receipts are less-often forgotten, if they are organized as they are received.
***Don’t forget that it’s important to keep all your receipts for six years in case the IRS doe an audit.
- Prepare Bonuses and Gifts and Make Year End Purchases
Now is the time to ensure that you’re accounting for all of your budget and purchases. Whether you’re granting employees a bonus, making a big purchase for your business, or buying gifts for your team—it’s important to know where you stand and to track these finances.
Bonuses, gifts, and year-end purchases can accumulate to a large expense, and could impact your taxes.
- Ensure Employee Information is Up to Date
It’s important that your employee information is up to date. You want to ensure that you have each person’s current address, legal name, social security numbers, and W-2.
We also recommend taking time to review their benefits, vacation time, sick days, and any other compensation to ensure that you know the status of each for the new year.
- Review Your Bank and Credit Terms
Now is the time to negotiate better interest and credit terms with your bank, it’s also a good time to ensure that anyone who need a card has one. With the interest rates fluctuating this past year, this is even more important now. Shop around. Be sure you know what you are spending.
- Prep 1099s
Make sure that you have the information you need from any contractor or vendor that you compensated (over $600) so that you can prep their 1099s.
- Take Inventory
Enter the new year knowing where you’re at, and ensuring that everything is balanced.
This information will help your accountant know what you spent on inventory, and what you have left. This helps to budget for supplies/inventory, moving forward.
- Check In With Your Accountant
Taking time to check in with your accountant now can help you have even more success in the new year. They’ll let you know what they need from you and can help you create a strategy for your business. They will also inform you of any new credits or deductions that may affect your tax liability.
- Set your Goals
Whether it’s on your own, or with your accountant, now is the time to prepare for next year.
Set ambitious goals that will motivate you to grow.
Last Thoughts
If you have any questions about anything we’ve suggested, please reach out. We’d love to support you however we can. Always happy to help.