4 Tasks Every Business Should Close Out the Year With
The end of the year is upon us, which means it’s that time again. ‘Tis the season to close your business’ books, get ready for tax filing, and plan for 2018.
It’s not going to be as fun as your holiday party or watching the ball drop on New Year’s Eve, but if your accounting team is organized and most of your financials are up-to-date, this should be a smooth ride into the new year. Besides, won’t it feel wonderful to relax on a holiday knowing this is taken care of?
Whether it’s with an in-house accountant or your Paragon Accountants team, these are 5 tasks that every business should close out the year with.
1) Financial Performance Meeting
“Those who do not learn history are doomed to repeat it.”
Compare how the business managed its resources year over year to find adjustments that should be made before the end of the year. Ask yourself: Is the business going to close-out the year profitably? What can you do to ensure a strong finish? Do what you can for the current year, and include your long-term goals in your 2018 plan along with improvements to make sure you aren’t repeating past mistakes.
Businesses of all sizes benefit from any kind of planning because it helps a business prepare for success. With specifically financial planning, your accountant can use your current and previous business evaluations to create a tentative budget. 2018 is coming full steam ahead, so the quicker you can get your finances in order, the quicker you can evaluate what the end of the year will look like and what you should expect in 2018.
2) Year-end Tax Planning Meeting
With your financial plan complete, have a tax professional connect the dots between your financial position and your best-case tax scenario. Maybe it’s time to make a significant equipment purchase, hold off on a large stock sale, or hire employees. Remember, manipulating expenses is a big part in decreasing your tax liability. This is accomplished by understanding and taking advantage of the various taxes your business can avoid. Keep in mind that scheduling regular meetings with a tax professional, in the long run, almost always saves you and your business money.
3) Don’t Forget About Independent Contractors
Even if someone works for your business but isn’t on payroll, the IRS still needs to know how much they were paid by your business. Throughout the year, it’s a good idea to request a W-9 form from any vendor or contractor that your business pays a minimum of $600 that year. That way at the end of the year, there is no problem sending those official 1099 forms to the IRS. Not everyone gets one of these forms though: corporations, rent payments made, any third-party payments such as PayPal, and even gift card and credit card payments are exempt.
4) Taking Inventory
Start 2018 fresh by knowing the quantities of products in your inventory. Even if you have an inventory tracking system, physical inventory checks are highly recommended at least once per year. For those of you that don’t have inventory in the traditional sense, don’t worry, this point is still valid. You should also take inventory in terms of office supplies and equipment that need to be upgraded, repaired, or purchased; assuming it is ‘allowed’ under your financial and tax plan. And don’t forget about people! As employees are one of the most important aspects of your business, use performance evaluations and encourage personal goal setting to guarantee growth. With a mindset to get all your ducks in order, you’ll have operations running smoothly and start the year off on a good note.
Still confused on how to close your businesses year with flying colors? Need some clarification on who you should consider an independent contractor? The experts at Paragon Accountants are here to help, so contact us today!