The end of the year is coming up and it’s about time to make sure that your accounting is in order to finish things up right and start the New Year on a clean slate. Making sure your bookkeeping is in order by the end of the year will set you up for easy breezy tax reporting. Of course every business is different, so each company may have its own unique needs in addition to the basics listed below. When in doubt, ask your bookkeeper or accountant.
Organize receipts and transactions Make sure you have all of your receipts for the year in one place and that they’re organized. If you’ve kept track of it throughout the year, kudos! If not, you still have time to get things in order. Then make sure that you haven’t made any business charges out of your personal account or vice versa. You’ll want to make a note of these for when tax time comes around.
Reconcile accounts Go through your paperwork and match transactions to expenses and income. Be sure your account totals match up to what you have in paper. This might give you some errors to fix.
Invoicing and collection Be sure you’ve invoiced all customers for services and products throughout the year. Once you’ve checked this over, be sure that all of them have paid. If any are lagging on payments, be sure to send them a reminder so that your end of year collections are accurate.
Inventory You’ll need an accurate inventory count as of Dec. 31. So get started now with the basics – how much you started the year with, how much you’ve sold, and what you’re left with.
Assets If you’ve acquired any fixed assets over the year such as computers, machinery or equipment, you’ll need to be sure that they’re all recorded on your balance sheet. Check to be sure you have all of the items on your sheet and include the depreciation of these as well. If you need help with the depreciation amounts, contact your accountant.
Expenses Be sure you’ve made your IRA and 401 (k) payments. Any other tax deductible items such as charitable donations should be made as well. Remember that as a small business owner sole proprietor, you may be able to list phone and internet bills as tax deductions. Check into these details.
Loans If you’ve taken out any loans, be sure they match the amounts on your balance sheet. If you’ve paid any off throughout the year, this should also be adjusted for tax purposes.
Mileage Although commuting isn’t tax deductible, other business mileage is. Be sure you’ve kept track of this throughout the year and organize your documentation for your tax preparer.
W-9s You’ll need W-9 forms from all contractors that you paid over $600 to throughout the year. Be sure you’ve asked for these.
Income Statement Be sure that everything adds up to give you the right numbers on your profit & loss details. If you’re numbers seem off, look for any additional receipts hiding in your purse or car or think if there were any other projects you did that alter your balance.
Simon Jiang, CPA, LLC / CBS Bookkeeping dba:
Comprehensive Business Solutions
Comprehensive Business Solutions (CBS Bookkeeping) has been providing Small-Medium Size Businesses with their Connecticut Bookkeeping needs.
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