The end of the year can be a hectic time if your business’ books aren’t in order. With taxes looming and the progress of your business to consider, it’s important that your financial information is accurate and complete. Your financial statements from the end of the year are more important that any others, and will be referenced for tax preparation and to track the growth of your business. Here are some tips for getting your books in order for the end of the year.
Get Everything in Order
As the year draws to a close, you should think about preparing all of your financial information for that year. Gather up sales and purchase invoices, as well as any record books for sales and purchases. Include anything else you have that is relevant to your finances, such as checkbooks, petty cash records and payroll records. Keep all of these with a copy of your ledger to give to your accountant at the end of the year (if you have one).
Better yet, if you use bookkeeping software, either use it to generate financial records or include a digital copy of your data. The more information you can give your financial professional, the more detailed a year-end report he or she can generate. If you are not using a bookkeeping software you may want to start.
Prepare a Bank Reconciliation(s)
A bank reconciliation matches the balances in your books with information from your bank statements. These should take place at regular intervals, such as every month, to make sure that your record of how much cash the company has is accurate.
When the year comes to a close, gather all of your bank statements from that year for review. A bank reconciliation can also be used to detect cases where fraud has occurred, so that you can then develop better controls to govern your bookkeeping system for next year.
Tax Prep Tips
The year’s end is also the time to take taxes into consideration. Look into purchases you can make to improve your business, while taking advantage of any tax deductions you can get for the current year.
Double check your inventory to see if you are eligible for any deductions due to a decrease in market value. Talk to your bookkeeper or accountant to make sure you’re getting the most that you can out of filing.
Start Thinking about Next Year
As soon as this year is over for your business, it’s time to focus on the next year. Look for ways that you can compile all of the information that you gathered up for this year as next year progresses. If there are any areas within your accounts that gave you a hard time while you were getting things in order, work out a system that can eliminate the hassle for next year.
Keep these things in mind while you work out your books for the end of the year. They will help to ensure your business sees a smooth transition into the next. Not only that, your financial reports for the current year may help you to secure your company’s growth in the future.
If that information is too much to do, then…
Top Reasons to Hire a Bookkeeper
For many business owners, the responsibilities of bookkeeping take up time that could be spent improving other areas of their business. Though the task can be tedious, bookkeeping is an essential part of maintaining and improving your business. Complete accounting records are vital at tax time, as well as to get a full understanding of your business. There are many reasons to hire a bookkeeping service rather than taking the books on yourself. Here are the top three reason:
1. To Save Yourself Time
As a business owner, you’ll have a multitude of responsibilities. From day-to-day decision making to long-term goal planning, many aspects of operating your business will demand your attention. Bookkeeping typically involves hours of filling out paperwork and crunching numbers, which can have an impact on both your work and your personal time. When you seek the help of a professional bookkeeper, you can stay focused on the big picture or on relaxing in your free time.
2. For Expert Assistance
Accounting can be a tricky field, with many exacting details to consider. Professional bookkeepers make their living working with these details and tend to be very skilled at doing so. By hiring a bookkeeper, you can be certain that your financial systems are accurate and efficient.
These individuals are trained to examine your records and correct any errors that otherwise could have been costly. Your bookkeeper will also manage things such as payroll and expenses, ensuring that everything is paid in a timely manner.
3. For More Credibility
At some point during their operation, many small businesses find themselves asking for a loan from a bank or other financial institution. These institutions want a chance to look at your numbers before they decide on giving you a loan, so it’s very important that your books are in order.
Not only will you be unlikely to get the loan if you can’t display your figures, but your financial institution will also want to be sure of the financial health of your company before they invest in you. A qualified bookkeeper can prepare financial reports that present your company’s potential for growth in the future. This means that you’ll be more likely to get the loan that you need to set your business on a path to expansion.
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