A Small Business Guide to the End of the Year

Out with the old and in with the new! Another year has come and gone and it’s time to settle the books for 2022 and prepare for the upcoming year. It’s important to look back on the last year and ensure that your finances and accounting are all in order. Juggling the past year’s books, coming down from the holiday bustle, and the kickoff of a new year can be overwhelming for small business owners. However, Tally Services has compiled our favorite end of the year accounting tips to help you ensure everything is in order. Completing these tasks can also set you up to sail smoothly into tax season and not feel like you're scrambling in crunch time.  

1. Get Your Books in Order - it may seem like a given, but it’s so important. It can be easy to let things fall by the wayside, some reconciliations here, things out of date there, the odd out of balance book left for future you to handle. But when the year ends, these all need to be straightened out. Start by making sure any missing payments are collected and unpaid bills are settled. Have you balanced your checkbook? Now’s the time. Gather your bank statements and verify that they match balance sheets to avoid audits. This will especially help when tax season arrives. Set aside an hour or two and really make sure your finances are all in order and your books are all up to date. Not only will your business be healthier, but you’ll feel so much better starting the new year clean, fresh, and organized.

2. Prepare and organize Reports - this step is important for both you and your investors or interested parties to know where you stand after another year as well as heading into a new one. There are a few reports you should absolutely run to get a better idea of your businesses financial health, including:

• Balance Sheet: This report is an overall look at the financial health of your business. It should include all your assets, liabilities, and equity. Looking at it will help you know where you currently stand financially and insight on where to move forward and set goals.
• Income Statement: This report will give you an idea of your business’s profitability and efficiency by looking at current gains and losses as well as listing your revenue and expenses. 
• Cash Flow: Your cash flow statement is important for understanding where your cash as a business is coming in versus how much is being spent and where it is going. There are three major areas you will find your inflow and outflow of cash: operating expenses, investing, and debts. 

3. Get Organized - It seems like every time you try to sit down and figure out where to even start, something more urgent comes up that needs attention. We get it. As a business owner, you’re trying to do it all, and organization is an easy thing to push to tomorrow or maybe next week. However, one of the biggest problems we run into is businesses with documents all over the place, or worse, nowhere to be found. Hopefully you’re not dealing exclusively with paper documents (if so, be careful of dust!), but it is time to clean up both the desk and the desktop before the busiest time of year hits. Check your accounts, balance your books, gather your invoices, file away receipts, etc. You’ll not only feel better, but you’ll be amazed at how much easier taxes are this year and next year! Find a system that works for you and stick to it.

4. Prep for Tax Season - It’s easy to lose track of time at the end of the year, but tax season will be upon us before we know it. As long as you’re running reports, filing paperwork, and balancing your books, why not go a step further and gather your tax documents. Look ahead for what you need and set it aside, all in the same place preferably. There’s nothing worse than scrambling to find the right document at the last minute. The more you do now, the less stressed you’ll be when it comes time to file taxes.

5. Ask for Help! - Running a small business can mean working in every department to keep the ship running, but you’re just one person. There’s only so much you can accomplish in a day, and if it’s getting overwhelming it may be time to outsource your accounting, bookkeeping, and tax prep. Giving those big year-end tasks to a bookkeeper can take a load off your shoulders and ensure nothing gets missed. With less stress and more time, you can focus on the business you love.

Are you ready to start 2023 with a clean slate? Tally Services is here to help you succeed, from organization to tax prep and everything in between. We’re here to make sure your books and finances are in order so you can make the best plan for growth the coming year. Contact us to learn more and find the plan that works best for you and your business.