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). 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.
Prepare a Bank Reconciliation
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 financial bookkeeper 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.