Although the 4th Quarter has barely begun, the BBB Team has been busy getting ready for year-end. At our firm, the first four months of the year requires “all hands on deck”. We find that year-end goes most smoothly when transactions and reconciliations are up-to-date before the actual end of the year.
As the old adage says: “Forewarned is forearmed.” So consider this week’s blog as a loving reminder from us to you. If you love your accountant, here are some basic things you can do to help them at year end. Remember: Happy Accountants = Happy Clients!
Reconcile your Bank Accounts
If you’re using any type of accounting software for your business, you likely are reconciling these accounts in your weekly or monthly bookkeeping. If it’s been a few months, now would be a good time to catch things up. We especially enjoy using Bank Rules as they can speed up the reconciliation process.
Prepare for 1099s
As many of you know, last year the deadline to submit 1099s was moved up a whole month from February 28th to January 31st. While this change caught many off guard last year, history doesn’t have to repeat itself. Now is an excellent time to review your files to ensure you have all the necessary information from your independent contractors. I won’t get into the details here, but see our recent 1099 blog for more information on 1099s.
Prepare for Taxes
Most businesses submit estimated tax payments to federal and state agencies to mitigate their tax liability at year end. If this is your situation, verify that all previous quarterly tax installments have been paid. Perhaps your business has achieved growth and you’re worried about the tax implications. Before the year ends, make an appointment with your CPA or tax professional. They can evaluate the current state of your business and offer suggestions on tax management.
Organize Expense Receipts
According to IRS Publication 463, most business expenses over $75 require proof of a receipt. Instead of handing over a shoebox of receipts to the CPA to sort through, take the time now to organize your expense receipts. The easiest method to do this would be to use a software solution. For example, Receipt Bank is a paperless solution that can extract all the critical data from your receipts simply by taking a photo through their mobile app.
Do you have unpaid invoices from customers that are several months old? Before the year ends, evaluate your current collection system. Ask yourself: Are your customers receiving paper invoices in the mail? Do they receive timely reminders when their invoice is past due? Are you only accepting checks or cash payments? Any of these challenges can be overcome with the use of technology. By implementing a combination of tools from your accounting software and working with a merchant service, you can speed up collections for the last three months of the year.
Many businesses use a third-party service to handle their payroll needs. Those services usually will manage the filing of payroll tax returns on your behalf. However, there are still some things you should do. Make sure any new staff hired this year completed all onboarding information, including their full legal name, mailing address, and Social Security Number. Are you going to be paying employees bonuses at the end of the year? Start planning out now which employees will be compensated and find out how to enter bonuses into your payroll software.
Year-end doesn’t need to be chaotic if you plan ahead. Still not sure where to start? Utilizing a bookkeeping service that specializes in automation can help. Our team at Beyond Balanced Books can provide you with a comprehensive evaluation of your accounts and offer assistance to get you on firm footing for year-end and beyond. Contact our firm at email@example.com to schedule your complimentary call.