The most wonderful time of year has come! Gift giving, holiday cheer, sleigh bells ringing! While the focus these days are on holiday celebrations and new year’s resolutions… for many small businesses, focus is getting bookkeeping up to date for their year end filing deadlines.
At SheDo Tax we realize it’s not always easy for our clients to keep up with their bookkeeping requirements. If you are a sole proprietorship, partnership, or corporation, and have fallen behind or feeling overwhelmed with bookkeeping, filing deadlines and everything tax…we are always here to help.
Below is a list of our top 10 tips and tasks that we have compiled to assist in wrapping up your calendar year end bookkeeping obligations. Our goal is to ensure your books and records and business requirements are up to date and you are ready to transition into a successful new year on the right foot.
1. Gather and Organize All Business Documentation
The first and most important task is to collect and review all income and expenses. This will include all invoices from sales made throughout the year and slips and receipts made on business purchases. Don’t forget to include documents that are business related but may not have run through your business bank accounts. Make sure to include all bills and invoices, even if they have not been paid yet. Be sure to manage all your documentation in an organized format in case the Canada Revenue Agency were ever to do a review.
2. Record All Transactions
This task may seem obvious but is imperative for having accurate financial reports and records for year end. You will want to ensure all business related transactions are properly and accurately recorded in the accounting software or spreadsheet of your choosing. We recommend also reviewing bank statements for any deposits or expenses to ensure no transactions are missed.
3. Reconcile Business Bank and Credit Accounts
After you have recorded all business related transactions, the next step is to complete any outstanding periods requiring reconciliation. Reconciliation is important because this is how you ensure that the income and expenses recorded in your bookkeeping software are accurate to what has gone through your bank. This task will also help you assess and rectify any discrepancies.
4. Review Accounts Receivable
A great business practice is to review your accounts receivables regularly to make sure you are getting paid when you should be. Review your list of all outstanding invoices and decide if any of these will need to be marked as bad debt.
5. Review All Payable Accounts
You will want to make sure the balances are accurate and up to date on all your payable accounts. This will also give you the opportunity to pay any late bills or record any payables that were missed during the year. If you are registered for GST/HST, WSIB or have payroll obligations, it is important to make sure all filing and reporting requirements are up to date to reflect these payable accounts. You will also want to review any business loans, credit card and other balances of liabilities to ensure accuracy.
6. Review Assets
Ensure any assets made in the year have been recorded correctly. Also ensure that any disposal of assets have been recorded correctly. Prepare for any amortization you may want to expense on your assets in the fiscal year.
7. Account for Inventory
If your business has inventory on hand, you must get an accurate count of the raw materials and products you have on hand at year-end. Tracking inventory will help you know how much you spent on inventory during the year, and its year end value.
8. Review Financial Statements
Once you have completed your bookkeeping, if you are using bookkeeping software like Quickbooks, it’s a good idea to review your Profit and Loss statement and the Balance Sheet to make sure your accounts and balances appear correct. These are your main financial statements, so we suggest that you review line by line, looking for dollar amounts or negative amounts that don’t make sense, or seem to convey inaccurate balances.
9. Year End Tax Planning
Most people think about taxes just once a year. As a result, they often lose the chance to make any meaningful changes to improve their tax balances owing until after the year ends. Tax planning near the end of the financial year gives you that advanced opportunity to determine, after all income and expenses have been entered, if it will benefit the company to make any large purchases, spend some additional funds on supplies, or contribute to ones personal RRSP.
10. Shop Around for a GREAT Accountant
Before the end of this year, if you are thinking about getting a new accountant (or maybe thinking of using one for the first time) it may just be the perfect time to reach out before the busy tax season is amount us! Be sure to review last years tax filing if you set up a meeting or call with an accountant. Express your needs and financial/business goals and to ensure any carry forward amounts are recorded. Having a great relationship with your accountant will strive for business success!
If you are still finding yourself overwhelmed with tasks after following these 10 tips, us ladies at SheDo are always here to lend a helping hand. Our goal is to make year-end as simple and painless as possible and allowing you and your small business to enter a new year organized and up to date!
Merry Christmas, and Happy New Year!