End of Year Tips:

Published by William T. Fricke at December 24, 2019

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At a time where we would rather be focusing on time with our family, wrapping up our last-minute Christmas shopping, and attending holiday parties, we cannot overlook our end of the year accounting. 2020 is just around the corner and our businesses should not suffer from lack of planning. Following these helpful tips from our team at Fricke & Associates, LLC can help you wrap up the year smoothly so you can focus on making holiday memories:

  • Maximize Technology—There are many helpful accounting software platforms which can help save your time and effort in such a busy season. Accounting software can help you make sure your income is tracked, your expenses are updated, your inventory is noted, and your employee records are all set. Through accounting software, your company can go into the new year in a great place for the upcoming tax season. If you need help determining the best software to suit your needs, our team at Fricke & Associates, LLC will be glad to help you find the right one.
  • Make Sure Your Records are Up to Date—Be like Santa and start checking your list twice. Now is the time to make sure that all forgotten receipts, to-do lists, and expenses are accounted for. Reconciling bank accounts monthly can make your end of the year check list much simpler. If you become consistent with that habit, you can minimize your end of the year work next Christmas.
  • Sort Your Expenses—Not separating business and personal expenses is one of the most common reasons for a tax audit from the IRS. Make sure you have carefully separated your expenses to save yourself the headache of an audit later. There are many software programs which can help you easily separate your expenses. It is extremely important to have a separate business bank account to avoid confusion. If you would like support in managing your business and personal expenses, we can help you find a solution to keep this process simple for you.
  • Check Your Inventory—The end of the year is a great time to make sure that your inventory matches what you have recorded. There are several tax forms which require this information in the future. Also, you want your records to accurately reflect the inventory you have on hand, which is used to calculate your taxable income.
  • Get Organized—As you are closing your books, take the opportunity to get yourself organized for the coming year. Going through contacts, updating records, and ensuring you have accurate employee information and addresses will save you considerable time and effort in 2020. When you are ready to send out your 1099s and W-2s, you will be ready for timely filing. Starting off organized at the beginning of the year will help you stay on track all year.
  • Prepare Necessary Reports—Even personally, it can be easy to become reflective at the end of the year. With your business, being reflective about your company’s success each year is crucial for the longevity of your business. Go ahead and run your profit and loss statement and balance sheet after all your financial data is updated. At this time, you can run reports for later use, such as a payroll summary, expense report, sales tax summary, and mileage log. Other helpful reports could include sales by customer, budget vs. actual, statement of cash flows, and sales by item. All these reports can provide useful information to determine how well you have met your goals and followed your budget. Now is also a good time to formulate your budget for 2020 based upon the data from last year. A successful year all starts with a well-thought out budget. If you need help making a budget or establishing a clear plan to meet your goals, the team at Fricke & Associates, LLC would be glad to help you.

Wrap up your end of the year accounting and get back to enjoying your holiday fun. We wish your family and company all the best this holiday season and in the year to come.

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