4 End-of-Year Accounting Tips for Small Business Owners

At Global Resources, we specialize in many areas of business, including accounting systems and information systems that help predict cash flow. We also realize that this is the time of year that small business owners must pay special attention to accounting. Managing your financial records is critical throughout the year, but even more so in December. By maintaining excellent records and keeping them in order, you’ll help yourself when tax time rolls around. This also sets you up for starting off the next year on the right foot.

Here are four tips for business owners to help keep on track with accounting tasks: 

1. Run a Few Standard Reports - Take time to assess where you stand financially and how that compares to previous years. Using your accounting software or looking through spreadsheets or other records you keep, you want to generate a complete financial report, which typically consists of a profit and loss statement, a balance sheet and your cash flow statement. Your profit and loss report is one of the keys. However, a business owner also has to develop key performance indicators that will help him manage the business by identifying the critical variables which will determine the financial performance of the business.  These key performance indicators and critical variables are the key to both operational and financial performance for the next year. 

2. Analyze Your Cash Flow Statements - Cash flow is the best way to tell how your money was spent throughout the year. You’ll want to take a look at three specific aspects of your business’ cash flow:

• Cash flow from operating activities (i.e. revenue and expenses)
• Cash flow from investing activities (i.e. assets purchased and assets sold)
• Cash flow from financial activities (i.e. loans and repayments)

3. Reconcile Accounts Receivable - You should have a running list of what invoices are still unpaid or which clients still owe you money for work already completed. If possible, chase these outstanding bills and try to collect before the end of the year. This will help with cash flow and give you a clean start for the upcoming year.

4. Double-Check Your Payroll and Benefits - It’s better to stay on top of any issues or corrections that need to be made to your payroll before year’s end. Ensure that taxable fringe benefits, such as third-party sick pay or a company car are accounted for. Other benefits that are easy to forget include educational reimbursement, health and life insurance, and transportation subsidies.

To learn more about us and / or to schedule your complimentary appointment with the business experts at Global Resources LLC, call us at 855-338-0266.