It’s the year-end, how’s your anxiety level? Do you feel worry creeping in as you imagine the gargantuan tasks waiting for you at the office?
The year-end is the most dreaded time for businesses. It’s the busiest part of the year because there are plenty of tasks to do so you can close your books, finalize your annual report, and prepare for the coming fiscal year.
Whether you have an accountant, a bookkeeper, or do everything yourself, here’s a checklist of year-end tasks to help you stay sane:
Do a Profit & Loss Review
As a small business owner, it’s important to prepare a profit and loss statement, also known as an income statement. A profit and loss statement shows your company’s revenues and expenses during a period of time. It gives you important information about the health of your business by showing how your company’s revenues are turned into the net income.
Organize Your Receipts
Good recordkeeping means collecting all your receipts. Whether you bought a box of paper clips or an expensive multi-function copier, any receipt that pertains to your business should be collected. This includes receipts from inventory, office supplies, travel, entertainment, advertising, and other related purchases. Also, keep scanned copies of your receipts because they fade easily.
Reconcile Bank Accounts & Credit Cards
Another task that you should do is reconcile your bank and credit card accounts. Make sure that your financial statements, your bank and credit card accounts, and yearend statements all match. Reconciliation ensures that your books are accurate with regards to all your cash transactions. It will also help you find errors, fraud, and record previously unrecorded transactions.
Organize Accounts Receivable, Billing & Invoices
Organize all your accounts receivable and invoices. Accounts receivable are outstanding invoices awaiting payment.
Your task is to start making calls on outstanding invoices to ensure that they are settled before the end of the year. This way, you can collect as much revenue as possible before year-end. You also need to pay outstanding bills and enter the payments in your system.
Check Payroll & Issue T4 Slips
Check your year-to-date (YTD) payroll. YTD payroll is the total amount of money spent on employee salaries, including payments to independent contractors. It lists your employees’ gross wages, taxes, deductions, and net wages.
It’s important to track YTD payroll so you’ll know much money you’ve spent on salaries and compare this expense to your annual budget. You also need to prepare and issue T4 tax slips to employees. The T4 informs them how much they were paid during the tax year and the amount of tax withheld. The deadline for issuing T4 tax slips is on the last day of February the following year.
Doing year-end accounting can be stressful but doing so will give you clarity and show you the current state of your financials. This can all help you plan better for the coming year.
Until next time,