It’s safe to say that this year has been far from ordinary, especially for businesses. But despite the hardships and uncertainty of recent months, the show must go on! And that means you need to get to work on your year-end activities. While many of us will be glad to see an end to this year, it’s also a time to look ahead and prepare your business for 2021.
Get started on your business planning for the coming year with the help of my small business year-end checklist.
Take care of the books
While some of us are able to stay on top of the books throughout the year, it’s not always so easy for everyone. Now is the time to get everything in order, gather your receipts, and make sure you have everything you need. It can be a tedious task, but you can promise to review things more regularly next year.
To provide accurate information for your year, make sure your bank account and credit card statements are up to date. It’s vital to have a precise picture of your income and cash. Make sure all your money is deposited into your bank for record-keeping.
Your mailed statements and e-statements need to be gathered and organized for all your business accounts. Go through your credit records to make sure you’re not missing any copies, and download and print documents if needed. This practice will prepare you for future audits and will keep your expenses up to date. Keeping a virtual copy of your statements is a good practice as well.
The more accurate you keep track of your records, the easier tax time will be for you.
Look back on the year
There are a few items that are important to look back on, assess, and make changes to:
- Ask the right questions. Now is an excellent time to look back over the year and think about what you’ve achieved. Did you reach your goals? What were your successes? What issues and obstacles have you had to overcome? Did you do a good job tracking expenses and employing an accounting program?
- Track down the details. Tracking your date, vendor, and amount is vital to your records, and if you don’t have these details, it’s essential to find them before the end of the year.
- Remember the extra expenses. Look back on “forgettable” expenses, such as mileage and depreciation from the year. These are important to be tracking, as they do add up throughout the year. If you struggled to track those expenses, you can download apps and programs to make it easier for you in 2021.
- Ensure all payroll payments are appropriately recorded. Your records need to reflect any new employees that were hired during the year. If any employee left your business this year, there needs to be details and forms from their time at your company.
An assessment of your year will help you plan for the upcoming year.
Review and Reconcile
Where are you financially? Are you able to achieve what you want with your budget next year? It’s difficult to know until you’ve thoroughly analyzed your figures. Get to work on:
- Accounts Payable and Receivable. If you have AP and AR, review them one last time before year-end and make sure all numbers are accurate. Update the list of who still owes you money and who you may owe money to at the year’s end. If you find you still owe money, try to clear up outstanding bills that due by the end of the year if possible. The cleaner your AP and AR records are, the smoother tax time will be.
- Count Inventory. If you keep inventory, it’s vital to have your final count of stock so that your records are accurate, and you can make the right orders for the start of the year.
- Payroll budget. Make sure you can afford to keep current employees on and decide if you need to hire additional help. Also, search your budget for funds available for next year’s pay increases. Ensure pay increase percentages are in line with your budget’s bottom line.
This will give you a clearer indication of where your business is financially so that you can make some critical decisions for the coming year.
Set goals for the year ahead
Planning for the year ahead is an exciting time for your business. It gives you the opportunity to think about what you want to achieve and start making some action plans.
Goals can be year-specific, but you need to make them in a way that allows you to meet your overall objectives for your business. Set goals that are measurable and can be assessed at a specific time next year. Here are a few examples of goals you can make for your business:
- Increase your sales
- Expand your business’s reach to neighboring areas
- Expand product or service offerings to fit your target market
- Eliminate low performing/low profitable products/services
- Add some low-cost benefits for your employees (some ideas)
- Be in a position to give raises to employees
- Succession planning
Prepare your taxes
The end of the fiscal year means it’s time to prepare your taxes. Whether you do this yourself or through an accountant, it’s your opportunity to think about your tax planning strategy and make sure that you submit everything you need.
If you’re not using an accountant to help manage your business’s financial standing, consider doing so. Utilizing an accountant who knows tax law and can help you organize your business could save you so much time and money.
After reviewing your current services, an accountant can advise as you move forward on the adjustments that may need to be made. If you already have an accountant, schedule a time to talk with them soon to ensure your accounts are in order.
While there’s a lot to think about in the lead up to the end of the year, the checklist above can help you get started so that your business is in the best shape to start the year ahead. If you’d like to look at another list that helps prioritize by dates, take a look here. 2020 may have been difficult, but hopefully, 2021 will be much brighter for us all.