As fall approaches and the end of the year draws closer, businesses of all sizes prepare to conduct year-end analyses of their operations. This requires taking time to prepare everything necessary for filing your business tax return and ensuring you can successfully close out the current year. The following tasks will help you make the necessary preparations and help you streamline the tax filing process.
Review Annual Income Goals
This is the time of year to review the goals you’ve set for your business revenue. When you do this, you can assess whether you are on track to meet those goals or need to revise your original plans. While optimistic projections may be helpful in driving your company’s growth, it is important to have a realistic understanding of your company’s annual earnings when conducting tax planning activities.
Run Year-End Financial Reports
The importance of this task can never be understated. By running financial reports at the end of the year, you can review the entirety of your business. When running a small business, it’s easy to become distracted as your attention is pulled in multiple directions. Accurate and complete financial reports give you an opportunity to take a comprehensive look at your business performance.
Some of the reports you want to ensure you include are:
- Profit and loss statements
- Balance sheets
- A detailed cash flow statement
Ensure Payroll Records Are Current
Conducting an audit or payroll report is essential when preparing year-end tasks. In addition to updating employee records, you can confirm that you have the correct status on new and former employees, especially by taking time to evaluate any access to computer systems or financial information.
Conduct a Backup of all Computer Files
If you are like most business owners, you rely substantially on the information on your computer. It is easy to lose records if you fail to conduct routine backups. You don’t want to lose any records necessary to file taxes or conduct your daily business.
Perform a Backup on Your Cell Phone
Chances are high that you use your cell phone for many business-related functions. These might include storing contact information for both customers and vendors, organizing meetings, keeping track of your schedule, and other important tasks. Unless you have a cloud service provider that routinely backs up your phone, the end of the year is the perfect time to ensure you perform a backup.
Take the Time Now to Save Time and Money Later
As a small business owner, certain tasks are necessary to prepare for the end of the year. These tasks are much easier if you keep up with some basic functions throughout the year, such as organizing receipts and invoices you will need when it’s time to file your taxes. Some tax planning information is only available after the close of the year’s business, but it helps to have a solid understanding of what you will need as the year comes to a close. When you remain on top of tax planning, you’ll be in a better position to prepare your business for the following year.