2017 is nearly over, and the holidays are coming to a close. But things are just as hectic as ever for many small business owners. With a mountain of year-end tasks on your plate and tax season looming, it’s easy to get overwhelmed. Following an end of the year checklist should help you keep all your ducks in a row and get 2018 started out on the right foot.
Gather Tax Information
Begin by compiling all the necessary documents for handling taxes. This can include:
- Income statements
- List of operating expenses
- List of assets bought or sold
- Invoices and receipts
Ideally, you will have this information already organized. If not, it’s smart to invest in some accounting software moving forward.
Double-Check Payroll Information
According to Fundera, “33 percent of small businesses get fined for doing payroll incorrectly, often because they’re trying to do it on their own and don’t know the nuances.” Claiming ignorance won’t work with the IRS, and you could get hit with some ugly penalties.
Always double-check everything payroll-related and make sure that you’re correctly classifying employees and independent contractors. For more on this, please consult RMI’s Payroll Guide.
Get a Snapshot of Your Cash Flow
It’s important to know how you’re positioned in terms of cash flow. There are three key areas to examine to determine this:
- Cash flow from operating activities (e.g. revenues and expenses)
- Cash flow from investing activities (e.g. assets purchased and assets sold)
- Cash flow from financial activities (e.g. loans and loan repayments)
Doing this unassisted can be a little tricky, so you may want to use a tool like the Pulse App. This will generate robust, visual-driven reports to fill you in on the details.
Perform an Inventory Count
If you have physical products, it’s a good idea to count inventory levels at the end of each year. You’ll want to ensure that you’ve got an accurate count for accounting purposes and to minimize revenue loss due to theft. This should also give you an idea of what type of growth your business is experiencing long-term.
Back Up Critical Data
We live in a very uncertain world. You never know when important documents could go missing and cause you unwanted headaches and financial loss. Do the smart thing and back up all critical data in a stable cloud environment.
Make sure to choose a cloud provider with an emphasis on security. Also be sure to carefully organize and classify information for easy retrieval later on.
Examine Your Needs for Next Year
Analyzing your situation at the end of the year should shed light on your needs for the following year. For instance, you may need to hire some additional staff members or downsize, invest in more equipment, adjust your budget and so on.
This end of the year checklist should serve as a basic template to close out the year with minimal setbacks. Hopefully, this will allow you to run your business with a greater degree of efficiency and help you make a smooth transition into the New Year.