The year is swiftly coming to a close. December is often crunch time for small businesses as they work to finalize a lot of their financial matters. It is important you get all of your financial affairs in order so everything is organized and ready to go come tax season.
Here are a few year-end steps you might need to take to get your business’s finances in order:
- Review all profit and loss statements: Your P&L statements will help you to form a holistic picture of your business’s financial performance throughout the year. How did your business perform with regard to revenue? Do you expect any other large expenses to apply? If not, how much money will you have available to make a larger purchase before the end of the year so it can depreciate?
- Review all vendor and lender files: Go over all of your paperwork associated with vendors and loan providers. All vendor 1099 forms should be fully accurate and updated. That information must also be inputted correctly in your accounting system.
- Review your inventory: The end of the year is a perfect time to conduct an inventory assessment if your business sells products. Compare the results of this assessment to the last inventory report you developed. Make any adjustments you need to ensure you have an accurate idea of how much capital is currently wrapped up in your inventory. If you do not sell products, it is still a good idea to take an inventory of other assets like office equipment, supplies, computers and other devices.
- Create a budget for the next year: After you have reviewed your year-end statements, you will likely have a better idea of the things you need to plan for in your budget for the following year. Pay special attention to your expenditures from this year and consider where you will need to focus your attention in your budget moving forward.
- Get a head start on tax forms: You are required to print and mail certain tax forms by certain dates. To avoid having to get all of your tax work done at once in the first couple months of the new year, you can get a head start now on filling out and printing those forms, even if you do not mail them immediately. These could include 1099s, 1096s and payroll forms, such as W-2s.
Looking for more tips about how to close out the year for your business’s finances? Contact us today at MCG Solutions and we’ll be happy to provide further information.