It’s that time of year again. Meaning, it’s once again the end of the year. For most people this means a mad rush of holiday shopping, a few weeks full of heavy eating, and, of course, taking the time to look nostalgically back at the past year and all that has happened. For small business owners this time of year means all of the hustle and bustle of the holidays PLUS crossing off all of the end of the year to-dos at work as well.
Just what are those to-dos? It can be easy to become stressed simply by the idea of needing to complete all of the year end tasks. This is why it is important to make a list of what needs to be done and decide if any of it can be delegated. As with most things, the earlier you start the process, the smoother things will go.
So, it is time for you (and Santa) to start making a list and checking it twice. Figure out what needs to be done to close out the year on a strong note. The good news is that we are here to help.
A Simple End of the Year To-Do List for Small Businesses
1 .Begin Tax Return Preparation
Many businesses operate on a calendar year as opposed to a fiscal year, which means that the start of the new year is go time for tax preparation. Most businesses start prepping even before the year ends. We have various posts written on preparing to file a tax return: 8 Things to Remember When Filing a Small Business Tax Return and 5 Steps for Preparing a Small Business Tax Return. Please check those out of more specific details on the steps required in regard to tax season and your company.
2. Double Check all Employee and Contractor Information
Make sure you have correct and up to date address information for employees and contractors because shortly after the new year you will be responsible for sending out W-2 forms to employees and 1099 forms to contractors.
This is also a good time to clean up your personnel files. Make sure any employee information you keep on hand such as emergency contacts and health information is accurate.
3. Review the Past Year’s Business Plan and Goals
Depending on the size of your business this may be something you do at your kitchen table one evening, or it could be done in a more formal setting with a team of managers. Either way, this is a very important end of the year task. If you don’t take the time to evaluate how the past year went, what was the point of setting goals in the first place?
4. Review the Accounts Payable and the Accounts Receivable
As the end of the year approaches, it is a good idea to take a look at your accounts receivable and accounts payable and see where you stand. Do you have outstanding invoices that need to be paid? Are you waiting on payments? Having everything in order will help as you jump into a new business year, and it will help with upcoming tax prep.
5. Review the Company’s Balance Sheet and Cash Flow Report
This goes hand in hand with looking over accounts payable and receivable. Before the year end, it is in your best interest to have an accurate view of where your business stands in regard to assets, liabilities, and purchasing power. Do this by examining the profit and loss statement, the balance sheet, and the cash flow report.
6. Set New Goals
Now that you’ve evaluated the company’s performance over the past year and investigated pertinent accounting reports, it is time to take that information and use it to help the business continue to grow in the next year. Determine reasonable goals for your business based on the information you have from this past year as well as work on tangible plans to reach them.
7. Check in With Your Accountant
…And not just to say, “Merry Christmas.” Checking in with your accountant will help to make sure you did not let anything slip through the cracks in regard to company finances. Furthermore, your accountant can also help you make sure that you will be getting the most out of your 2019 tax return. This short article from Merrill Lynch can give you an idea of how your accountant or tax advisor could potentially be helping you before the year ends.
8. Mail out Holiday Cards
This is not necessarily a “must do,” but it can be a nice touch to send out holiday greetings to clients and vendors.
9. Celebrate the Year with Employees
Amidst all of this reviewing, evaluating, and organizing don’t forget to celebrate the year’s accomplishments with your staff! Everybody has worked hard this past year. You could throw a holiday gathering, send out a congratulatory email listing the business’ best stats from the year, or simply order in pizza for lunch as a reward for a job well done.
You have your list, now ready, set, go!
If you are looking for help with your year end business tasks, contact us at Lumen Advisory and Finance!