With the holiday season upon us, many business owners start to think about all of the necessary year-end bookkeeping and accounting tasks again. And while this is possibly one of the busiest seasons for your business, it's also important to accurately close the current books, and start preparing for the upcoming year.
That said, you can make these tasks less onerous by breaking down your year-end accounting tasks into three steps:
1. Bring Your Books Up-To-Date
As the year comes to a close, you need to have a strong understanding of your business’ financial situation. This means spending the extra time to bring your books up-to-date.
If you have a bookkeeper or accountant, give them time to create all of the necessary reports that are relevant for your business, and schedule a time to go through these reports together. This ensures that all parties have an understanding of where the business is financially. This step is also beneficial because once the books are up-to-date, it is much easier and cost-efficient to prepare your tax return.
2. Review the Books
Once you are confident that your books are up-to-date, it is time to review the financial health of your business with an accountant.
You'll want to go through documents such as the profit and loss statement and balance sheet to identify any year-end tax strategies that may be beneficial to the business. These strategies may include deferring income, making purchases, and contributing to a retirement plan.
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