Growing Your Business

Year-End Accounting Housekeeping Tips

by
Julie Farless
on
12/13/2016
Year-End Accounting Housekeeping Tips

How you end your year can have a lot of bearing on how the next one goes. Get 2017 started right by taking care of these accounting tasks before the year ends. Some cut expenses like taxes, others make it easier to run your business from day to day. All can help improve your financial outlook for 2017.

  1. Make purchases now. 

If your company's income was higher than you expected, you could offset any unexpected tax liability by buying needed items before the end of the year. Do you have equipment that needs to be upgraded? Are there new tools that could make your business run more efficiently? Can any vendors be paid in advance (applies to cash basis taxpayer only)? By making these expenditures now, you can increase your business's deductions to cut your tax liability. 

  1. Defer income. 

If your business uses the cash basis of accounting, by sending invoices out late in the month, you can increase the chances that they will be paid next year instead of this year. Since income is taxed in the year it is received, this gives you a chance to push some of that taxation into your next year of business. 

  1. Update your software. 

Have you been hitting "update later" on key applications month after month? Old versions can slow you down and leave you vulnerable to cyber attacks. You should also see if there are new versions of your software available and whether these provide worthwhile benefits for your business. Take the time to do all updates and upgrades before the end of the year to get a fresh start in January. 

  1. Reconcile your books.

Are all credit card accounts and bank accounts properly recorded? Are there any stale, outstanding checks that need to be voided or reissued? Get this task out of the way before employees start leaving for end-of-the-year holidays. This gives you a chance to look over employee expenses and other items to ensure that your cash books agree with your bank balances.

  1. Go through old papers. 

Most filed papers are never looked at again. At the end of the year, go through financial documents to see which need to be kept to comply with IRS rules and which can be archived or shredded. Look into digitizing documents where possible to cut down on the physical clutter in the offices.

  1. Clean up customer and vendor accounts.

Go through your books to look for duplicates, old balances, and any missing information. Look for any vendors that your company no longer uses or customers who are no longer around. These can be archived to clean up your records. 

  1. Make sure you have W-9s on file for vendors. 

You should have collected a form W-9 from your businesses services providers and independent contractors before paying them for the first time. If not, get them as soon a possible since the deadline to file 1099-MISCs information returns for services has moved from February 28th to January 31, 2017. By getting all of the documentation you need in advance, you make it easier to get out tax forms on time. 

  1. Review key financial reports.

Ensure transactions are posted to the correct accounts. Look over balance sheets and profit and loss statements. Review open invoices and unpaid bills so that you know where you are starting in 2017. 

Include a few of these tasks a day or make a special day to go through all of them. By getting these end-of-the-year tasks handled early, you can ensure that you start 2017 fresh.

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Julie Farless

Julie Farless

Martinez & Shanken, PLLC is a Certified Public Accountant (CPA) firm based in Gilbert, Arizona. We provide a full range of accounting, bookkeeping, consulting, outsourcing and business services, but we specialize in tax preparation. We work with you to ensure that your personal or business processes are conducted in a manner that ensures ongoing integrity in your financial transactions. We are available to answer your questions and help with your ongoing tax planning and changing business needs.

Deborah Martinez & Earl Shanken
29 reviews

Arizona

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