12 Oct 2017
Although the end of the calendar year is still a couple of months away, it’s not too early to think about the things that your business needs to do to prepare for the upcoming tax season and to make sure your financial house is in order for the year to come. To avoid stress and frustration, it helps to get an early start on your company’s year-end accounting tasks. Here are a few things you can do to ensure that you have smooth sailing. Your virtual chief financial officer can provide you with specific advice based on your business’ exact needs.
Check Up on Paperwork for Vendors
If your company worked with any vendors or independent contractors throughout the year and ended up paying them more than $600, you are required to send them a 1099 at the start of the next year. To do that, you need to have the correct paperwork on hand for those vendors, usually a W-9. Go through each of your vendor’s files and make sure you have their information, including their current address and tax ID numbers. If not, you should send them a W-9 to fill out. Doing this before the end of the year will help you avoid scrambling to get your 1099s out in a timely fashion at the start of 2018.
Evaluate Profits and Loss
Reviewing your company’s profit and loss statement or income statement lets you take the pulse of your business. You’ll be able to see if you’re bringing in enough revenue to thrive or if you’re continually spending more money than you earn. Knowing whether you are in the black or in the red can help you determine if you need to cut back on certain expenses or if you have enough money on hand to make a large purchase. It can also help guide you as you create the budget for your company for the next year.
Consider Any Last-Minute Purchases
If your profit and loss statement is showing profit, it might be in the best interests of your company to invest some of that profit in the purchase of equipment or supplies for your business. That way, you can begin to take advantage of the item’s depreciation on this year’s tax return, rather than waiting until the next year.
Follow Up on Accounts Receivables
As the end of the year approaches, it’s a good idea to collect on or at least attempt to collect on any unpaid accounts receivables. Making sure your business is getting paid by the customers it works with is one way to help improve your cash flow. Also, the sooner you contact people or companies that still owe your business money, the more likely you are to have them pay you. The longer an unpaid invoice remains unpaid, the more likely it is never to be paid.
Get Started on Next Year’s Budget
The end of the year isn’t too soon to start thinking about and planning your company’s budget for next year. In fact, it makes sense to have at least a first quarter budget outlined before December 31 rolls around. That way you have an idea of whether or not your business will have enough income to cover the costs of any new expenses during the first part of the year, such as any new hires you want to make in January. When creating a budget for the new year, add up expected expenses and compare them to your anticipated income.
Schedule a Meeting with Your Virtual CFO
To avoid the tax-season rush and to make sure that your company’s financial ducks are in a row, the end of the year is an ideal time to schedule a check-in with your company’s virtual CFO or to consider outsourcing some financial responsibilities to an outsourced CFO if you haven’t already. Your CFO can help you piece together an action plan to make sure your company is on track to achieve its financial goals and other objectives.
To learn more about New Direction Capital and how our virtual CFO services can help your company prepare for the end of the year and for the future, http://newdirectioncapital.com/contact-us/contact us today.
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