Top Five Tips to Prepare for Year-End
As November begins, you may be thinking about the holidays, vacation planning and maybe even snow removal. What you might not have thought about is year-end planning. Year-end is a confusing and complex time, both for businesses and individuals alike.
There’s a lot to consider, forms to be filled and meetings to be scheduled. Plus, with the continuing impact of tax reform and various other regulations, there’s even more to think about as 2019 closes and 2020 opens.
As you begin to plan for year-end, here are five tips to help you prepare for the coming new year.
Balance Sheet Checklist
To successfully get ready for year-end, it is important to make sure your accounting records are up-to-date and accurate. Important pieces to consider include:
- Make sure assets match your liability and equity on your balance sheet.
- Perform bank reconciliations for all cash and credit card accounts and determine if there are any checks or deposits that haven’t cleared.
- All invoices and accounts payable are entered, particularly if you are on an accrual basis.
- Adjust inventory, prepaids, etc. as needed.
- Prepare information for Forms W2, 1099, etc.
Tax Reform Considerations
The Tax Cuts and Jobs Act continues to impact individuals and businesses alike. The resources you put into planning now could save you time and money in the future. Scenarios impacted by tax reform include corporate tax rates, state and local tax, accounting methods, depreciation, alimony, and many, many more. To ensure you are up to date on all the changes, plan to meet with your accountant sooner rather than later. This will ensure you have enough time to discuss the impacts tax reform will have on your business as you close out 2019.
Running a business never comes with a shortage of to-do items. One of those items is the forms that need to be filled out to stay compliant. Specifically, we are talking about Form W-2. If your company has employees, it’s important that you understand the form, and how to correctly fill it out.
You’ll also need to determine if you have employees or independent contractors. The business relationship between your organization and the person performing your services is an incredibly important one to define. Why is this important? When it comes to year-end planning, employees receive Form W-2, while independent contractors receive Form 1099-MISC.
Look Beyond Finances
When you are preparing for year-end, it’s common to focus on your finances. After all, your finances determine if your business is profitable or if changes need to be made to increase revenue or control expenses. While finances are important, don’t forget about other crucial areas of your business that could use some attention at year-end.
Common items to check up on are your technology and cybersecurity. Some questions to ask yourself include:
- Are my systems secure and up to date? Is my information backed up?
- Has there been any suspicious activity in emails or other electronic communication?
- When was the last time passwords were changed?
- Have employees been trained on best practices surrounding technology?
- Is my software still meeting the needs of the business?
Answering these questions will help you obtain a clearer picture of your business’s technology infrastructure, and help you identify any threats that may be waiting to attack and harm your business.
It’s Never Too Early
There are a lot of factors and considerations surrounding year-end planning. To ensure you and your business are prepared, meet with your business advisor sooner rather than later. The sooner you meet and begin discussions, the more time you have to uncover and resolve any pesky surprises that might pop up. Meeting with your business advisor regularly can help you feel more prepared to start the new year off on the right foot.
Year-end can be a busy, stressful time for business owners and individuals alike, but it isn’t something you need to do alone. At Eide Bailly, our business is about more than just numbers; our business is built on relationships. We care about your success and want to ensure you are prepared for an amazing 2020. To learn more about successful year-end planning, visit www.eidebailly.com/yearend.