Businesses see high activity at the end of the year. If you’re like most company owners, you’re probably balancing busier traffic, higher sales, and payroll chores with end-of-year accounting procedures.
Use a year-end accounting checklist to arrange your manner of closing the year rather than rushing (or forgetting) to get your year-end operations finished.
You have several accounting duties to complete before the clock strikes midnight on December 31. You should have clean, current accounting records that are prepared for the start of a new year.
1) Organize Your Important Financial Documents
Financial records are essential to any business. There are three advantages to going over your financial paperwork:
It first reveals if your company is healthy or whether you need to restrict your budget moving forward.
For example, have you not forgotten about the 500 dollar loan with monthly payments that you took at the beginning of the year?
Your records should include information about your assets, liabilities, revenue, costs, and cash flow and should serve as a roadmap for your company’s financial situation and health.
Second, financial papers show you where modifications are necessary and specify how much you need to alter if you do need to make changes (for example, greater sales or fewer costs).
Third financial details of your company must frequently be made available to interested people whether you’re looking for investment, expansion, or mentorship.
2) Recover Unpaid Invoices
Try to collect the money your clients owe your company if you wish to close your books for the year.
To do this, additional work must be put in to collect past-due bills before the beginning of the next year. Moreover, as practice shows, the profit of many industries has increased significantly.
Some customers might be content with a courteous invoice reminder. Others might need to be prodded harder.
When discussing past-due payments with customers, act professionally.
If receiving payment from clients becomes difficult, think about offering them a payment schedule.
The customer might not be able to pay the full sum upfront. If you agree to an installment plan, you could be able to get paid more rapidly. It also shows that you are sensitive to their needs and understand them.
If you can’t raise the money on your own, think about hiring help. For a fee, collection companies can assist you in recovering unpaid bills.
A part of the total amount owed is usually kept by the collection agency.
3) Give Employees’ End-of-Year Needs Priority
A wonderful end-of-year task is to evaluate how your benefits package meets the demands of your employees. Benefits packages might include anything from stock options and 401Ks to health insurance and much more.
Even as a tiny firm, you can maintain employer competitiveness by making sure your benefits packages are excellent.
Given that a very big problem for small businesses according to Statista is inflation, which is increasing more and more.
Single most important problem for small businesses in the United States in October 2022
Source: Statista.com
Make sure the W2s and 1099s for your employees are completed, accurate, and sent out on time. ADP, a payroll agency, may assist with providing the required forms. Check your state’s unemployment insurance rates for the upcoming year at this time as well.
4) Choose Your Position
Finding out where your firm is right now is the next item on your small business year-end checklist.
Review the targets you set for last year. It’s time to look at how your firm got to where it is now that you are aware of its location.
Review last year’s goals by bringing out your company strategy and any other planning materials, such as the action plan from the previous year.
Did your company achieve the goals you had for it? If not, why not? Write down your performance this year. These can come in helpful as you prepare your business for the upcoming year.
5) Examine Your Webpage
It’s more crucial than ever to have a reliable website for your business in an e-commerce-driven era.
Your website serves as the front entrance to your company for many of your consumers, and first impressions count.
Start by visiting your website and clicking on every link. Try using the “contact us” box to send yourself an email or text message.
Make that the 800-number is operational by calling. Although these may seem like simple tasks, these systems frequently fail.
Your website is a crucial asset to maintain in top condition since it serves as both your digital calling card and the public’s initial introduction to your company.
6) Check the Vendor’s Details
This year, both your business and your vendors underwent a significant transformation.
Check that each of your vendors’ contact details, including name, phone number, and email address, are still accurate at the end of the year.
Remove any inactive suppliers or false information from the system. If you have the time, assess your working relationships with your vendors and look for ways to improve your bargaining position in the next year.
7) Physically Inventory the Property
However, that’s not the only reason to do it if your company operates according to the calendar year.
In addition to being crucial for tax considerations, conducting a yearly physical inventory is a terrific method for you to assess which goods sell well and which don’t.
Many suppliers are ready to exchange slow-moving inventory for something you can consistently turn over more rapidly, except in the case where it is out-of-date.
8) Keep a Record of Your Professional Achievements
Last but not least, taking some time to consider your company’s achievements this year should be one of the top items on your small business’s end-of-year checklist.
The positive developments that occurred in your company this year may surprise you.
Gathering, discussing, and enjoying your company’s accomplishments with your staff at this time of year is a terrific way to foster camaraderie, boost morale, and conclude the year on a positive note, albeit it might take some time.
Conclusion
The adage “businesses that fail to plan, plan to fail” is well known. We all understand the need for company planning, but it’s simple to put it off amid the daily pressures.
This year-end checklist should motivate you to get started and simplify your preparation. Perhaps even feeling motivated for the upcoming fiscal year.
