5 Things to Do NOW to Be Ready for Year End

The holiday season is upon us and everyone is busier than usual, but that also means that year-end is just around the corner. There are a few things that you can do now that will make the process easier and help you be prepared before January 1 arrives.

Review your subcontractor data. Did you subcontract any services during the past year? (This includes attorneys, CPA's and accountants, as well as any other services you might have outsourced.) If so, and you paid them more than $600, you are required to send a Form 1099 to them by January 31. Verify that you have their complete data, including address, SSN or Federal ID Number.

Evaluate your company financials. Take some time to go through your Profit and Loss report, Balance Sheet and General Ledger to make sure that you have captured all your transactions. Verify that all your bank accounts have been reconciled and any loans and interest have been accounted for appropriately. Check the status of your accounts receivable and accounts payable. If you have any customers who’s debt is uncollectible, write it off as “bad debt”.

Review personal expenses for business purchases. Is your business entity a sole proprietorship, single member LLC or partnership? Review your personal expenses, especially if there is any co-mingling of business expenses. If you find any, gather the receipts and/or cancelled checks and enter those expenses into your company’s bookkeeping software. It’s common for business owners to pay more taxes than necessary because they forget about business expenses that were paid from personal funds.

Submit expense account data. If your business is a corporation, you and your employees need to submit any expenses for reimbursement (and receive the check for it) before December 31. This will ensure that the corporation will receive the appropriate tax deduction for the expenses being claimed. Expense forms can be easily created with a spreadsheet and can be completed monthly or quarterly. Receipts should be attached as evidence of the expense in the event of an audit.

Prepare any year-end donations. These should be postmarked by December 31 if sending by mail. If you are using a debit or credit card, the donation must be charged (not paid) by December 31 in order to be counted toward this year’s charitable donations. Of course, earlier is better to avoid missing the deadline.

Consider hiring a bookkeeper. If the current state of your books makes you want to bury your head in the sand or if you just have too much going on to deal with it the way you know you need to, think about getting help. If a full-time bookkeeper is not in your budget, consider outsourcing. A remote bookkeeper can be a saving grace to a small business owner. You can get a professional who cares about your keeping your business books accurate (maybe more than you do) and not add all the costs associated with hiring another employee. NOW is the time to find that person so that they have time to get everything in order and you aren’t rushing to find missing receipts with Tax Day approaching.

If you need help getting your business books in order for tax time, you can contact us for a free consultation.

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