6 Steps for a Year End Ready Business
To help prepare for a smooth transition at the end of the year, here is a handy checklist for what you can start doing now to make your life easier at tax time.
1- Reconcile accounts
If you subscribe to any of my bookkeeping packages, this is done for you! Just make sure that you check your email for any information requested and after you have ensured that I have everything I need. Kick back, relax and then move on to the next step.
2- Capture fixed assets
Did you make any big purchases that should be recorded as an asset (generally an item that costs $1,000 or more with a useful life of more than a year)? You may want to ask your tax preparer if they want any purchases less than $1,000 tracked as fixed assets since there is no rule on this amount.
3- Identify all 1099 Vendors
Review the vendor payments so far this year to be sure that you have W-9 forms for all vendors who have (or will be by year end) paid $600 or more and are not a corporation. Do not wait until the end of the year to get this information since some vendors are not eager to provide this information and the deadline to file forms 1099 is January 31st. Save yourself the stress and get this information now!
4- Verify Employee Information
If you have payroll, it’s good to check in to be sure that you have all of the information needed to issue correct W-2 forms, including the employee’s current mailing address. An easy way to do this is to have your employees review and update their most recent form W-4.
5- Review your unpaid bills and unpaid invoices
Check on any old but still open vendor bills and well as any customer invoices to verify that they are valid. You may find some loose ends that need to be fixed or old amounts that need to be written off.
6- Review and update inventory
If you carry inventory, review the account to find out when it was last verified and what is actually on hand. Plan to conduct a physical count and make adjustments before the year ends.
