Your Year-End Checklist for Bookkeeping Tasks Made Easy
As the year draws to a close, small business owners and the self-employed need to take stock of their finances. With the end of the year approaching, it's a great time to review your books and ensure everything is in order. Doing so will ensure a smooth transition into the new year and set you up for success. Reviewing your books can save you time and hassle in the coming months.
1. Review Payroll-Related Information
At the end of the year, employers must ensure that all payroll records are up-to-date and accurate. Additionally, it is necessary to submit form 941, which reports the taxes withheld from employee payments and FICA taxes for each quarter of the year. This ensures that all employee payments and taxes are accounted for properly.
It's important to double-check that all the employee data is reported correctly, such as benefit changes or other fringe benefits, deferred compensation, wages and deductions, paychecks, bonuses and raises, time-off balances, and tax withholding amounts. Additionally, run a last payroll report to ensure everything is in order.
2. Complete Necessary Employee and Contractor Forms
If you're running a business with staff, it's essential to prepare the necessary paperwork. Employees should file Form W-2 and Form W-3 with the Social Security Administration by the end of January. Additionally, for contractors or vendors, you'll need to submit IRS Form 1099-NEC by the end of January.
3. Take Inventory
Having an accurate count of the materials and supplies you have is important to know how much was spent on them and their current value. To ensure that your inventory totals match the amount stated on your balance sheet, double check the numbers. If there is a difference between the two, identify and resolve the issue.
4. Check Payables and Receivables
It's critical to review both your outstanding payables (bills from other entities) and receivables (invoices you sent to other entities) if you use the accrual system for your business. At the end of the year, calculating the total of these figures can be beneficial for tax purposes; certain businesses are required to pay taxes on the accrued amount. This will give you a comprehensive view of your financial status at the end of the year. Additionally, you can determine if there are any missing invoices.
5. Plan for the New Year
Take the time to assess your current bookkeeping practices and determine if any improvements could be made. Evaluate how the past year went from a financial standpoint and what you can do differently in the New Year. Utilize the New Year's fresh start to set yourself up for success and take a proactive approach to your bookkeeping. Ensure you have the right tools and strategies to monitor and track your finances throughout the year. With the right planning and preparation, you can achieve the financial goals you have set for your business.
Conclusion
As the year-end draws near, ensure accurate reporting and compliance with accounting standards. By following this checklist, businesses can ensure that their books are kept up-to-date and in compliance with applicable laws and regulations. This checklist is also a great tool for saving time and money, as it can help businesses stay organized and on top of their bookkeeping tasks.
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