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For many small businesses, the year-end accounting process can feel overwhelming. Bookkeeping Services San Jose From tax preparation to budgeting and planning for the next year to ensuring you’re on top of technology and software updates, it can feel like there’s a lot to do within a short time.
But there are many benefits to getting everything in order before the end of the financial year. It demonstrates good financial health to your stakeholders, reduces stress, and sets your business up on a positive note so you can spend more time focusing on setting new strategies and achieving your goals.
Use this year-end accounting checklist to ensure everything is in order so you can hit the ground running in the new year.
Year-End Small Business Accounting Checklist
Prepare a closing schedule: Begin by creating a timeline highlighting key dates and deadlines, ensuring ample time for gathering necessary documents for accurate record-keeping.
Review financial statements: Analyze your business’s income, balance sheets, annual reports, and cash flow statements. Doing so gives you a better understanding of your financial position so you can prepare for the year ahead.
Review accounts payable and receivable: Review your business’s accounts payable to see how much money you owe other companies and vendors. Also, review your accounts receivable to see how much money customers owe your business. This strategy can help you gauge the profitability of your business and provide insights regarding how to be more cost-efficient.
Expenses review: Evaluate your business’s expenses across departments, programs, and projects. This analysis can help you to make sure that they are in line with your strategic objectives.
Reconcile bank accounts: Ensure your records are accurate by checking that the information in your business bank account — including the opening and closing balance and the individual transactions — matches your accounting records.
Keep bookkeeping accurate and up-to-date: Regular, accurate bookkeeping helps you stay on top of how much you’ve spent and how much you’ve earned.
Inventory review: Check your business’s stock and ensure you’ve ordered enough to meet the predicted demand until your next review. This review reduces the chance that you will run out of stock and gives insight into which of your products are performing best.
Tax preparation and compliance: Ensure your business is registered to pay taxes and keep up-to-date records of your income and expenses. Stay updated with tax changes, and pay promptly.
Payroll reconciliation and employee benefits: Make sure your employees’ compensation and benefits are accurate by comparing records to ensure they match up.
Confirm vendor information: Conduct thorough due diligence on your vendors to make sure they are still in good standing. Verify that the information you have on each of your vendors is still up to date. It’s especially important to confirm the vendor’s payment information, and to check that your point of contact hasn’t changed.
Create a backup of everything: If hackers gain access to your systems or your technology suddenly breaks, you risk losing important data. To avoid disruptions, ensure you have a backup of everything, including your computers, tools, and subscription data.
Create a budget: A planned-out annual budget that forecasts the year’s income and expenditures helps you track your business’s financial standing. It also allows you to establish your priorities, objectives, and spending limits and facilitates more accurate long-term planning.
Market trend analysis: Carrying out a thorough market trend analysis can help you identify new opportunities that you might have missed throughout the year. This can help with revenue projections, and increase your profitability going forward.
Set goals: Defining goals provides a clear direction for your business and lets you know which areas to prioritize to promote business growth. Setting specific goals throughout the year provides you with benchmarks for success. These benchmarks allow you to track your progress and assess your accomplishments.
Conquering Year-End Chaos: Budgeting and Planning Solutions for Small Businesses
Once you've gone through the checklist and are comfortable doing everything necessary to wrap up the year, it’s time to start budgeting and planning for the next fiscal year.
Aenten has over 16 years of experience in helping small businesses to maintain strong accounting infrastructure. Outsourced Bookkeeping Services in San Jose As the year end approaches, we can help you make sense of your finances, organize your accounting processes, and assist you if any unexpected difficulties arise. Once we’ve ironed out any kinks, we’ll work to help you to create a strong budget forecast for the upcoming fiscal year.
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