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As a small business owner, the end of the year isn't just a time where you can croon Auld Lang Syne over Champagne! Instead, there are seemingly countless things you must do, which is why having a year-end checklist for small businesses makes dollars and sense.
At John F. Dennehy CPA, we completely understand there are a number of different items you can include on your business' year end checklist. However, we've highlighted a few of our favorites that we view as must-have year-end checklist items for small businesses.
First things first, you have to get your books in order and reconciled. While some well-oiled businesses will have no problem with this step, others may have a glove box loaded with receipts that haven't been filed or even touched in months. In either case, it's critical to get this step right before you move onto any other items on the checklist.
What we've found is the most successful small business owners may struggle to find time and the expertise to confidently get the books in order. As a result, these savvy business owners either hire an accountant or outsource this task to an experienced accounting firm.
Clearly, the latter option is more cost effective and feasible than hiring a full-time or part-time accountant. And if you're considering partnering with an accounting firm, make sure you know what to look for in the best accounting firm and some of the top questions to ask.
If your business involves the warehousing of materials or products, the end of the year is the perfect time to have a clear picture of what you have on hand. It's also the perfect time to make corrections to records that may conflict with your physical counts.
In the event you notice substantial discrepancies in your estimated vs actual inventory, it's strongly suggested you investigate the matter more deeply. In addition to ensuring you or your employees are accurately keeping records, this can help assure your business isn't experiencing internal loss from employees.
The end of the year is one of the most opportune times to evaluate your business goals from the previous year. Because you are beginning to have a clearer picture of where your business is, you can examine how you got to this point more closely.
Did you achieve the goals for the year? Did your business meet quarterly milestones? Were you even close? Take the time to document your thoughts on the failure to meet yearly and quarterly goals or on the accomplishment. This simple year-end checklist item for small businesses can offer you key insight into what worked well and what needs to be improved to climb to the next level.
For example, you can begin to understand whether the increase in marketing spend resulted in the desired increased sales. By examining your goals in depth, you can walk away with true introspect and insight into how aggressive you can be with next year's goal setting and budgeting.
Your accounts receivables are absolutely vital to your business. Because of this, the end of the year is a great time to create a running list of any invoices that are still outstanding. If you can, it's best to try to collect on these invoices before the end of the year. Doing so can give your business a potentially significant bump in cash flow and start the new year off with a nice clean slate.
Your employees are everything to your business, which explains why having accurate and up to date employee information should be on any year-end checklist for small business. Because people move and change numbers all the time, make sure you have the correct address and phone number for every one of your employees.
You can also verify you have the most accurate payroll information. This will also give you the opportunity to update the status of both former employees and new employees. Most importantly, it will force you to review any proprietary information, financial information, or computer systems former employees may still have access to.
In addition to your employees, the end of the year is a great time to check up on the quality of information you have for suppliers or vendors. Make sure you confirm phone numbers, addresses, and points of contacts are all active. You can also update your vendor records with any new relationships you may have started during the year.
Were there times when additional employees would have resulted in more profits? The end of the year is one of the most opportune times to analyze where it makes financial sense to add a new employee. Consider whether the projected profits would warrant the addition to your team.
If you notice the need at one time of the year over others, you may want to consider using a seasonal employee or a college intern. In either case, your staffing needs should be included item on your year-end checklist.
At the end of the year, you have a lot on your plate; and managing complex financials may not be your forte. If this explains your situation, don't hesitate to reach out to the experienced accounting professionals at John F. Dennehy CPA.
Contact John F. Dennehy CPA
We at John F. Dennehy CPA are a team of certified public accountants who service clients throughout Long Island. The services that we provide are comprehensive, and we can resolve multiple accounting needs for a client.