Year-end can be one of the busiest times for a small business as they work to get their books in order. Here are some tips to help you relieve bottlenecks in your accounting reporting and set up an efficient workflow in your business year-round.
It starts at the beginning of the year
It almost goes without saying that the best way to plan for a smooth year-end is to plan early, start off on the right foot, and deliver consistent service to customers throughout the year.
This involves making sure each month your accountant has the information needed to reconcile your business accounts.
Top tip: Ask your accountant to put together a bookkeeping checklist for you that you can tick off when you hand over your monthly files. This is particularly helpful if your business doesn’t an accountant on staff.
By starting the year with an organized process, you can avoid back tracking in December trying to see where the gaps are for the whole year.
Create a year-end countdown
Preparing for the financial year-end can be a lot of extra work on top of your day job, so create a year-end countdown with calendar reminders and a progress chart.
Brief your employees on the fact that it’s year-end and encourage them to do everything they can to tighten expenditures, collect purchase orders and invoices, file expenses, and clinch every last order.
Make sure your accounts are up-to-date
Every column of figures in your financial accounts should add up correctly and tally with all your invoices, bills, deposits, and bank statements.
List sales made before the year-end, but not yet paid for, as outstanding debtors. Include the amount, invoice number, and invoice date.
If there are any invoices that you suspect may not be paid, write a note of them with a brief explanation.
You don’t have to run the year-end specifically on the last day of the year. Most businesses wait until they have processed all of the payments and receipts for the year they are closing.
Check your chart of accounts
The chart of accounts, or COA, defines which accounts relate to your profit and loss report and which relate to the balance sheet.
Ultimately at year-end, the COA controls which accounts are cleared down for the new year so it’s important to make sure it’s right.
Ensure your employee data is up-to-date
Double-check that your payroll and expenses calculations are correct at year-end. Be sure to also keep track of all expense claims and ensure employees attach the correct receipts to their expense forms throughout the year.
Do your housekeeping
Make sure your files are all in order and your invoices, receipts, and statements are filed and stored neatly where you can easily find them – either as hard copies or online. You’ll need to keep your records on hand for three years just in case your accounts are ever requested by the IRS.
Clear communication with your bookkeeper
As a small business owner, it’s likely that the two times of year that you will talk to your external accountant or bookkeeper the most are at tax season and year-end.
During these busy times, it’s important that you let your accountant know what your expectations are in terms of communication. Think about theContinue reading