Are you ready for the end of the fiscal year? We’re close to the year end and there is less than a week left to make major financial decisions on behalf of your organization.
Keeping your financial records in order is extremely important to the success of your business. Not only does this keep you up-to-date on your profits and losses, but legally speaking, it’s necessary to have your records organized. Understanding exactly what goes into a fiscal year-end close can be confusing. Using a professional outsourced accounting service, can ease the confusion and tension of the end-of-year financial tasks. As a business owner, it’s important to understand the things to do in order to get ready for 2018.
Prepare for the end of the year financials by following this accounting year-end financial checklist.
🗸 Set a timeline for important deadlines (W2’s, 1099s and final paychecks)
In order to start January 2018 successfully, a timeline is necessary to prepare.
🗸 Implement a budget for 2018 that’s reflective of realistic goals
Budgeting will keep you focused on your goals, and should be done before January 2018.
🗸 Prepare a 90-day cash flow forecast for Q1 and possibly for Q2
Without a cash flow forecast, a business is running blind! As a business owner, it's important to know how much cash you have right now, how much cash you’re going to have in 6 months, and how much cash you'll have a year from now. Which is why it's so important to have a 90-day cash flow forecast prepared. This will help in planning realistically for your business.
Many businesses tend to run out of money which leaves them scrambling to find resources such as obtaining a line of credit from the bank.
🗸 Perform bonus calculations for your staff
Don't forget to plan for your employee’s bonuses in your budget. Employees always appreciate receiving bonuses in time to purchase holiday gifts, especially before major holidays.
🗸 If you have inventory, do a year-end physical inventory
Make sure you know what your physical inventory is by the end-of- the- year, if your business has inventory -- such as a restaurant or a consumer product company.
🗸 Make sure you have a statement or a schedule that tie to each balance sheet item
Each balance sheet item should be backed-up by a list of details that when summarized equals the balance sheet item. Professional accounting consultants can make sure you’re prepared.
🗸 Go through fixed assets and determine if any should be disposed of or taken off the books
There might be things that you’ve already thrown out or given away that are still appearing on your fixed asset schedule. A business should not be reporting depreciation and amortization on items that it no longer owns. Be sure to make an inventory of everything in your office (chairs, furniture, TVs, computers, etc..) and determine if it needs repair or disposal.
🗸 Meet with your CPA and determine tax liability. If possible, spend money in December (cash basis) to reduce liability
If you are a cash basis taxpayer, but your books are on an accrual basis, you can spend money before the end of the year and get the tax write off. If you write a check on January 2nd, you no longer have the ability to write that off in 2017, even if it was a planned 2017 expense.
> View our helpful infographic for your fiscal year-end checklist needs!
Managing your financial records is not only critical throughout the year, but even more so each December. By maintaining excellent records and keeping them in order, you’ll help yourself and your accountant when tax time rolls around. These 8 end of financial year accounting procedures will help prepare you and your business for financial success in 2018!
If you need help with your business' financial records, Pro Back Office provides outsourced accounting services. Pro Back Office would like to show you the benefits of outsourcing your accounting department. Please contact Pro Back Office at: 877-868-6164 or use our online contact form.