The end of the year can feel like a drag for many small business owners, as they grapple with spreadsheets, get to grips with a year’s worth of transactions, and desperately try to finalize budgets.
But what if you could swap chaos and confusion for calm celebration instead?
With a pinch of planning, a smidgin of structure, and professional tax planning in Coral Gables, you can close out the year as a small business owner, calmly and concisely.
Check out the following 5 tips for a calmer end to the year, and a smoother entry into January:
- Don’t leave reconciling and reviewing until the last minute
Waiting until the end of December to ensure that your financials reflect the truth, is a recipe for disaster. Instead, start reconciling all of your accounts: bank, credit and loans, well in advance. Check every transaction and every balance, while reviewing the accuracy of your income and expenses, re-checking that your chart of accounts is still appropriate for your business.
If something doesn’t match, you’ve got plenty of time to get it fixed before the year closes out.
- Get accounts receivable and payable organized
Ignoring incoming and outgoing invoices can lead to chaos when trying to close out the year; to avoid this, do the following:
- Send customers reminders for overdue payments
- Get any outstanding vendor bills recorded and paid
- If any invoices are uncollectible for some reason, write them off
By keeping you’re A/R and A/P up-to-date, you can keep your balance sheet clean and improve the accuracy of your cashflow.
- Get expenses and documentation organized
Every expense needs to be correctly categorized along with the corresponding documentation; from subscriptions and software renewals to receipts, they all count. Keep transactions that are personal and business, entirely separate, and make sure that travel, mileage, home office costs and other deductibles are properly logged.
With clean records, you stand a much higher chance of your tax filing being clean too.
- Carry out a review of payroll, taxes and compliance
It’s always best to seek professional help from a small business tax expert at the end of the year, if only to ensure that you’re compliant. If you’re not, you could face stiff penalties at a later date. Here’s what you should be doing:
- Checking and verifying employee and contractor details (names and addresses as well as tax IDs)
- Reconciling total wages, bonuses and withholdings
- Confirming tax payments and checking that they’re up-to-date, reviewing W-2 deadlines, 1099s and other filings
If a large tax bill is expected, it’s best to start planning for it before the year ends, rather than in February.
- Reflect on the year gone by
With help from a tax preparation service in Miami, review the numbers for the entire year, and see if there are any ways in which you could save money in the future. Automation might be worth considering, as might outsourcing; both of which can make operations more efficient and save you money in the long term.
Use this time at the end of the year to reflect on what has gone right for your business financially, and what hasn’t been so effective. Armed with all the necessary knowledge, you can then start focusing on growth for the new financial year.
To turn chaos into calm as the year-end approaches, use the 5 tips outlined above and glide into a new financial year with confidence and pride!
