The holiday season is the busiest time of the year for many business owners. Not only do business owners try to increase their sales, but they also have to complete their end-of-the-year accounting and bookkeeping tasks. Here are 3 accounting tips to keep you on par for an audit-free tax season.
3 Accounting Tips For Your Business To End The Year
Bring Your Books Up-To-Date
You need to have a good understanding of your business’s financial status in order to prepare for tax season. You may have to spend some extra time making sure that your books are up-to-date. You will also need to give your accountant plenty of time to create the necessary reports. Additionally, you should go over the reports with your accountant.
Going over the reports with your accountant will allow both of you to see where the business is financially. It will also be easier for your accountant to prepare the tax return.
Review The Books
After the books are up-to-date, you and your accountant will need to assess the financial health of your business. Examine the profit and loss sheets in order to find tax strategies that can benefit your business. This includes things such as making contributions to a retirement plan, deferring income and making purchases.
You may also want to examine the pros and cons of your current accounting system. You may find an accounting application that is better for your business. Additionally, now is a great time to review your choice of business entity and retirement plan.
Close The Books
After you have updated your books and looked at your current situation, you can close the books and start making preparations for next year. You should also clean up your electronic and physical bookkeeping files. You will need to manage and clean old bank accounts, expense account, old customer accounts and inactive vendor accounts.
Furthermore, now is a great time to start making a budget for next year. Before you create a budget, you should look at last year’s finances. If you start identifying potential expenditures and estimated monthly income early, then you will be able to pinpoint potential issues that may arise.
If you are looking for an accountant, then Larry L. Bertsch, CPA can help.
