End of year is fast approaching and it’s time to get your books in order. For many business owners, the thought of year-end accounting is overwhelming – what do you need to do to get your books in tip-top shape for year-end?
1. Get your books up-to-date: Many small business owners push off their bookkeeping tasks until they cannot push it off any longer. Guess what? That time has come. With just a few weeks left of the year, now’s the time to make sure all the transactions from the year are in your accounting software and that monthly bank reconciliations are complete. Thankfully, today’s technology has made this task a lot simpler and online accounting software can help you automate your bookkeeping to cut down on time. In our Business Process Outsourcing (BPO) department, we use Quickbooks Online (QBO) which has a bank feeds feature to automatically pull all transactions from our clients’ accounts so that we just need to review and “approve” them before they are entered. Month-end bank reconciliations are easier in QBO, as well.
2. Review your receivables and payables: While this is important at any time of year, if you do not review your receivables on a regular basis, now is the perfect time to take a look. For customers from whom you believe you can collect, send them a quick follow-up email or give them a phone call. For those who you know for certainty will never pay, write it off. The same goes for your payables – if they are accurate, pay the debt or leave them in your records. For any old, inaccurate payables sitting in your books, write them off now.
3. Prepare for 1099s: If you employ outside contractors, pay other LLCs or attorneys for services, begin sending out the W-9 forms now. The deadline for filing 1099s is January 31st and your accountant will be calling you for this information soon after the new year starts. Get ahead and start collecting the data now.
4. Review your financials, or ask your accountant to take a look: Once all the transactions have been entered into your accounting software, print a balance sheet and P&L (profit and loss statement). Comb through the items line-by-line for anything that looks out of the ordinary or inaccurate. Additionally, if you have a habit of putting transactions to “Miscellaneous” throughout the year, take a look at the details of that account now to clean it up. Book each transaction to its correct account and avoid having to do this with your accountant in March.
Need help getting your books in order for the end of year? Reach out to firstname.lastname@example.org to learn more about our bookkeeping & virtual CFO services.