small business tasks end of year Archives - MoneyThumb https://www.moneythumb.com/blog/tag/small-business-tasks-end-of-year/ Boost Your Productivity Tue, 18 Dec 2018 13:22:57 +0000 en-US hourly 1 https://wordpress.org/?v=7.0.2 Small Business End of the Year Checklist https://www.moneythumb.com/blog/small-business-end-of-the-year-checklist/ https://www.moneythumb.com/blog/small-business-end-of-the-year-checklist/#respond Tue, 18 Dec 2018 13:22:57 +0000 https://www.moneythumb.com/?p=39836 Over the last few weeks, the Rules of Thumb blog from MoneyThumb has talked about the end of the year tasks for accountants and also...

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]]> Over the last few weeks, the Rules of Thumb blog from MoneyThumb has talked about the end of the year tasks for accountants and also end of the year tasks to help get your personal finances off to the right foot in 2019. To wind up our end of the year advice on this Tuesday--exactly one week before Christmas--we'd like to share with you an end of the year checklist for small business owners.

The following checklist is courtesy of The Balance Small Business.

This small business year-end checklist will help you get your income taxes in order and get your business planning off to a good start.

1) Get your financial books in order.

For some small businesses, this is really difficult while for others it's a breeze. But whether you're one of those solo entrepreneurs with a glovebox full of receipts that haven't even been entered yet or a small business person who has a bookkeeper on your payroll, you have to get this step done before you can do anything else.

So get the help you need and get on with it. Hire a bookkeeper and/or accountant if you need to.

2) Determine your position.

The next step on your small business year-end checklist is to figure out where your business is now. There are three areas you need to examine:

a) Finances - Examine your financial documents and analyze ratios.
First, you need to prepare (or have prepared for you) the standard three business financial documents that will be the basis of your decisions. The Balance Sheet is a summary of how your business is doing financially at a particular point in time. It shows all your business's assets, liabilities, and equity.
The Income Statement lets you see at a glance whether or not your business is profitable at a particular point in time by itemizing your revenue and expenses, resulting in a profit or loss. The Cash Flow Statement reconciles your opening cash with your closing cash for a particular period, showing you where the money has gone. To prepare a simple cash flow statement, for a particular time (such as the year just past), list and summarize your business's cash flow inflows and outflows for each of these three areas:
  • Cash flow from operating activities - such as revenues and expenses
  • Cash flow from investing activities - such as assets purchased and assets sold
  • Cash flow from financial activities - such as loans and loan repayments
This will show you the net increase or decrease in your business's cash flow over the period of time you're looking at and show you at a glance where the money went. Once you've examined your balance sheet, income statement and cash flow statement, dig a little deeper by checking your business's current ratio, total debt ratio, and profit margin. It won't take long with your balance sheet in front of you.
b) Goals - Evaluate your goals from last year.
Now that you know where your business is, it's time to take a look at how it got here. Pull out your business plan and any other planning documents such as last year's action plan and review last year's goals. Did your business accomplish what you set out to do? Why or why not? Make some notes on your thoughts about the successful accomplishment of your goals (or lack of it). These will be handy when you do your business planning for the current year (step 3 of this small business plan checklist).
c) Taxes - Evaluate your current tax strategies.
Which tax strategies have you used and how well did they work for you? Investigate different tax strategies that you haven't used, such as changing your business structure to a corporation. Talk to a professional such as an accountant and/or tax lawyer to get advice about which tax strategies would be best for your personal and business circumstances.

3) Plan for the coming year.

All right. You’ve done all the groundwork and you're ready to do some business planning. That means that you are going to:

  • Set next year's goals.
  • Prepare an action plan or plans.
  • Start implementing your action plans.

 

Before you set any goals, see the Guide to Goal Setting to make sure you are setting goals that are going to help you accomplish what you want to accomplish.

4) Get your tax documents prepared.

You can turn over the required documents to an accountant or prepare your income tax yourself. Getting Your Tax Records Together for Your Accountant lists the key records your tax accountant will need to prepare your income tax. If you happen to be using one of the excellent cloud-based accounting software programs for record keeping, one of the many advantages is that your accountant will be able to directly access your business records online.

 

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