Prepare Your Business Financials for the New Year with These 4 Tips

You may not have gotten into business ownership for the cash-flow calculations and budget spreadsheets, but here we are. You’re in it now — eager and ready to run circles around those cell and conditional formatting formulas, right?

Well, eager might be a strong word, but with reasonable expectations and proactive effort, we can certainly pin down the ready part of that equation. The best way to tackle the aspects of small business management that you dread is to dive right in.

Use the holiday lull to your advantage, give yourself a pep talk, look those numbers in their face and say confidently, “I’m not afraid of you!” Or simply break down preparations for your business financials in the new year with these four tips.

Pull and Review Year-End Reports

There are a handful of financial documents worth gathering at year’s end. In fact, it wouldn’t hurt to pull these docs quarterly, if not monthly. There’s really no such thing as overkill when it comes to keeping tabs on revenue and profit.

Making it a regular practice to review balance sheets, income statements, cash flow statements, and projections keeps your finger on the pulse of revenue, profit, and the overall financial health of your business. It also helps you respond more strategically to last-minute business needs throughout the year that you may not have accounted for previously.

Discuss Financial Goals with Your Accountant

If you have an accountant on your payroll, use them. Before the new year begins, sit down and discuss goals for the future. Are they realistic? What will you need to change or take on in order to meet them? Would there be any financial benefit to changing your business structure?

Make it a point to talk through questions and concerns ahead of tax time chaos. And confirm that all necessary parties are aligned with decided next steps.

Start Prepping for Taxes

Speaking of taxes, it wouldn’t hurt to get ahead of the paperwork. Especially when you consider all the other to-dos you’ll undoubtedly be juggling come January 1st.

Your accountant will likely need the following records, to name a few, in filing taxes on time:

  • Profits-loss, income, and cash flow statements

  • Employee payroll information

  • A list of business expenses (receipts included)

Make sure you have everything you need to get those items in order sooner rather than later. For instance, if you work with US-based contractors, ask them now to send you a Form 1099-MISC. The last thing you’ll want to be doing when up against tax season deadlines is trying to track down their information.\

Trial Technology That’ll Make Accounting and Bookkeeping More Efficient

Technology is a beautiful thing. As far as accounting is concerned, there are plenty of services out there that make it possible for you to simplify and automate your bookkeeping and reporting process.

QuickBooks is one such tool you can rely on for getting your small business finances in order. Pro tip: keep an eye out for discounts offered towards the end-of-year for those looking to trial their services cheaply before diving all in.

By Staples Canada

December 12, 2019