The end of the year is approaching, which means it's time to start thinking about year-end financial closure. As a business owner, you want to ensure that everything is in order and organized for a successful year-end close. In this how-to guide, we will provide you with four tips to prepare for year-end financial closure.
As a business owner, year-end financial closure can be a daunting task, but it's essential for the successful operation of your business. Taking the necessary steps to ensure your accounts are reconciled, expenses are accounted for, and your books are up-to-date is critical. In this how-to guide, we will provide you with four tips to help you prepare for year-end financial closure.
Don't Wait Until the Last Minute
The earlier you start, the better. Waiting until the last minute can result in delays and mistakes. Ensure your accounts are reconciled and expenses are accounted for. Don't let your books fall behind or get in the way of a successful year-end close. Being prepared can save you time and money in the long run.
Gather Your Bank, Credit Card & Line of Credit Statements
Contact your financial institution to request copies of your statements and records. While you may be able to download statements and records online, you may need assistance getting records dating back to the beginning of the year. Once you have gathered everything your bookkeeper needs, provide an income statement and a cash flow statement that reports changes in your balances due to operating and investing costs.
Organize All Purchase Records and Receipts
Upgrade from a shoebox and start organizing your receipts digitally. Investing in a digital scanner means you don't have to worry about faded ink, water damage, or lost documents. Speak to Censea Bookkeeping about Receipt Bank, the document management app that will keep those receipts in order. If you prefer to keep your paper receipts, keep them in one place and sort them by date, purchase type, or cost. Organizing your receipts can make a significant difference to your bookkeeper.
Itemize Your Deductions
As you prepare for year-end financial closure, don't forget to itemize your deductions. Take stock of everything that might count towards your operating expenses, such as your vehicle and home office. If you use your personal vehicle for business, keep a record of your total number of miles driven, the reason for each trip, fuel costs, and dates. If you use your home office to conduct business, you can claim expenses like rent, utilities, maintenance, and insurance on your tax return. Your bookkeeper can help you calculate your deductions.
Conclusion
In conclusion, preparing for year-end financial closure takes time and effort. However, following these tips will make the process smoother and stress-free. Remember, the earlier you start, the better.
