It’s October, which is the final quarter of the year. Crazy, right? As we approach the end of the year, businesses of all sizes should review their financial health and ensure they end the year strong and are set for success in the coming year. A thorough year-end financial checklist can streamline the closing process, help identify tax-saving opportunities, and prepare your business for growth in the year ahead. Here's a guide from our team at ICS to help you wrap up your year on a strong financial note:
Reconcile Accounts
Ensure all bank accounts, credit cards, and loans are reconciled with your financial records. This is crucial for identifying discrepancies and correcting errors before year-end.
Review Outstanding Receivables and Payables
Take stock of your accounts receivable and payable. Follow up on overdue invoices and ensure an accurate picture of what’s owed to you and what you owe.
Evaluate Fixed Assets and Depreciation
Conduct an inventory of fixed assets and confirm the depreciation schedules are up to date. Disposing of or purchasing assets before year-end could have significant tax implications.
Prepare for Tax Filings
Organize and review all financial documents needed for tax filings, including W-2s, 1099s, and other required forms.
Ask your employees whether to receive their W2s electronically or by mail. If by mail, they should ensure their address is updated in your payroll system.
Request those W9s from contractors now so you won’t have to chase them down in the new year.
If you’re going to end the with additional profit, think about giving your team bonuses. This great tax deduction could reduce your tax liability while increasing employee morale.
Compare this year’s financial performance to your budget and previous years. Identify trends and areas for improvement. This will help guide your strategic planning for the coming year. For instance, compare your business's performance for the first three quarters of this year (January- September 2024) to the first three quarters of last year (January- September 2023). Ask yourself, "How was my revenue this year compared to last year?” Did it increase?--Great! Has it remained flat? Did it decrease?- Why? Also, take a look at your gross profit and net profit. This tells you how much you get to keep after covering all of your expenses.
Update Your Budget for the New Year With a clear understanding of this year’s financials, now is the perfect time to create or adjust your budget for next year. Be sure to factor in any expected changes in revenue or expenses.
Consult with Your Accountant or Financial Advisor A year-end review with a professional can help uncover opportunities for tax savings, cash flow improvement, and strategic growth. It’s always a good idea to get an expert's perspective before closing your books.
By following these steps, your business can enter the new year with a clean financial slate and a clear plan for continued success. At ICS, we’re here to assist you in making the most of year-end financial planning. Contact us to learn how we can support your business’s financial needs.
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