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.