The end of the year is a stressful time for small business owners, not only because of the holiday season, but also due to year-end accounting. Whether you have a finance and accounting team, outsource bookkeeping to an online bookkeeping service, or take care of it yourself, there’s a lot to prepare
To help, NEWITY put together a 7-step checklist for year-end small business accounting:
1. Identify important activities and due dates – Make a list of everything that needs to be done and use a calendar to identify the deadlines for each task, e.g., reporting and data processing deadlines, fiscal close date, etc.
2. Collect documents – Collect and organize important documents, such as: Inventory counts; last year’s tax returns; loan statements; payroll; outstanding invoices, receipts, and financial reports.
3. Reconcile all transactions – Ensure your documents match other files and statements, like credit card statements, invoices, and receipts.
4. Review asset accounts – Confirm everything in your asset accounts match with supporting documents. Reconcile cash accounts and record adjusting entries accordingly as well as compare inventory records with actual stock.
5. Close out accounts receivable and payable – Make sure you’ve settled any collections and debts.
6. Compare your budget with actual outcomes – Review your 2022 budget and determine if the business was able to adhere to your allotted amounts in each category. Take this under or over performance to help create your budget and goals for the year ahead.
7. Make a plan – After completing steps 1 – 6, determine areas for improvement in 2023. This may include a different document collection method, creating calendar reminders for due dates so you do not miss tax or fiscal deadlines, or adding a secondary reconciliation step monthly or quarterly. Having a plan in place will keep you organized and set up for success for 2023.
If this accounting and bookkeeping list is daunting, or if you want to implement a new system for 2023, NEWITY and Xendoo are here to help. NEWITY partnered with Xendoo to bring flat fee bookkeeping services to its small business members. Find out more about Xendoo HERE.