As we approach the end of a particularly stressful and tumultuous year, it’s time to take a moment to assess the financial state of your business and complete your accounting end of year checklist. A single mistake on one financial statement during one business year can snowball into major errors when it’s time to complete your taxes, financial forecasting and additional accounting tasks. Organizing an end of year checklist is a wonderful way to ensure you are prepared for 2021.
Check Your Internal Controls
The end of year period is the best time to review your internal controls and decide whether or not additional controls or fail-safe procedures are necessary. Every year, employee theft at businesses costs $50 billion, and small businesses are the hardest hit. Even if you have trustworthy employees who have been with you for years, you are still at risk for theft and fraud. Internal controls stand between you and a very unpleasant financial surprise.
Collect Your Accounts Receivable
Particularly during a financially strenuous year like this one, make sure that you collect all outstanding receivables before the end of your fiscal year. Check in on unpaid invoices, reissue any checks as necessary and resolve all reconciliation issues as part of your end of year checklist to start the year on good financial footing.
Take Care of Tax Preparations
Ensure that you are prepared to deliver all of your employees their W-2 forms and all of your contract workers their 1099 forms before the deadline on January 31st. If you fail to issue W2 forms on time, you could be subject to penalties from the IRS. It’s always a good idea to send these out as soon as possible at the end of the fiscal year. Now is also the time to meet with your tax professional at MKS&H CPAs and Business Consultants to ensure you are prepared to file your taxes. Spending a little time before the end of the year can confirm that you have enough money set aside and help you to fully understand your tax obligation. It can also pinpoint areas of improvement for next year to help you maximize your deductions.
Monitor Your Cash Flow
Do you know how much cash your business has on hand? Running out of cash can leave your business in a precarious position, and December is the ideal time to assess your current cash flow and set aside the money necessary for January sales, production, hiring and expenses. Your accountant at MKS&H CPAs and Business Consultants can walk you through your current accounts and help you to forecast for 2021.
Get Help With Your End of Year Checklist from MKS&H
MKS&H provides accounting services to businesses of every size and in every industry. We can work with you to complete your end of year checklist and prepare you for a new year of financial success. Contact us today for a consultation.