New Call-to-action  New Call-to-action  New Call-to-action  New Call-to-action  New Call-to-action

Recent Posts

Organize Your Business for Year-End

By Heather Cherry • February 24, 2020


How to Get Your Small Business Organized for Year-End

It’s that time of year. When you gather up income statements, receipts, and tally business expenses. Closing your year-end books is an important step for your business. Here’s how to get your small business organized for year-end:

Review Profits and Losses

As a business owner, it might not be fun realizing your business didn’t meet revenue goals, or worse, experienced a significant loss. Either way, it’s important to assess your profits and losses to determine how to implement changes.

Take a critical look at your primary financial reports including Profit & Loss Statement (P&L), Balance Sheet, and a Detailed Cash Flow Report. Did you meet or exceed expectations?

It’s also a good idea to conduct a yearly review of your business plan. This helps measure and analyze success. Do you need to adjust your business plan to meet revenue goals?

Organize Administrations

The end of the year is the perfect time to make sure all employee, vendor, and supplier contact information is accurate.  

Discard outdated files on your computer or filing cabinet. If you’re using a paper filing system, replace file folders that may be worn out or torn.

In a digital age, it’s easy to forget electronics can fail. Back up your computer(s) and cell phone(s) with a backup drive option.

Conduct an inventory, especially if your business operates on a calendar year. If you have a surplus of slow-moving inventory, contact your supplier to see if they’ll exchange for something you can turn-over more quickly.

Reconcile Accounts

Reconciling your financial accounts to statements – accounts receivable and payable – is an important part of the year-end process.

The reconciliation of accounts receivable involves matching detailed amounts of unpaid customer billings to the general ledger accounts receivable. Differences in the two may be a result of a journal entry error, an incorrect billing posted, or an aged receivable was run on a different date.

If you’re not sure of how to complete accounts receivable and payable, a bookkeeper can help. Bookkeepers can manage transactions, deposits, and income in the company ledger. If you already utilize a bookkeeper, be sure to acquire the appropriate records for tax purposes.

You’ll also want to reconcile your payroll if your business has employees. Be aware of year-end payroll accounting issues that can arise like withholding taxes for fringe benefits, deferred compensation, and bonuses.

Finally, if your business deals with sales tax, you’ll need to reconcile payable sales tax.

Collect Income Records and Receipts

Gather all business records including income, expenses, and identifying information – your Employer Identification Number (EIN). 

Did your business use vendors this year? If you haven’t already done so, you’ll need to collect W-9 forms – the Request for Taxpayer Identification Number and Certification – for any vendor you spent more than $600 with, according to the Internal Revenue Service (IRS).

If you use an accounting software, your program will likely have a line item for all 1099 vendors and contractors.

Next, you’ll want to sort through receipts for tax deductible expenses. Expense reporting can be frustrating at tax time if you haven’t maintained an organized system. Most accounting software allow for electronic receipt storage. If you keep paper receipts, now is the time to sort and total.

All the basic expenses necessary to run a business are generally considered tax deductible. Those expenses may include salaries, office rent, equipment, supplies, telephone and utility costs, legal and accounting services, subscriptions to business publications, professional dues, and other administrative expenses (i.e. postage, software, services fees, etc.).

If you operate a home-based business, you may be eligible to claim a deduction for your office space.

Talk to your accountant about how (and what) to claim as a tax deduction. 

Make a Tax Appointment

Most small businesses opt to have their taxes completed by a professional as they tend to be more complicated. If you’re planning to use a Certified Public Accountant (CPA) or other tax professional, make an appointment as soon as you have your information gathered since availability fills up quickly this time of year.

If you’re a new small business and concerned about hiring a tax professional, consider checking credentials and asking for their updated Prepared Tax ID Number (PTIN) or other licenses. Ask for references or verification of completed continuing education credits. For more information about how to choose a tax preparer, visit the IRS **website. (**Link: https://www.irs.gov/newsroom/ten-tips-for-choosing-a-tax-preparer)

This article is not to be taken as tax advice. Tax rules change and vary by location and industry, consult a CPA or tax advisor for specific guidance.


Internal Revenue Service: https://www.irs.gov/forms-pubs/about-form-w-9