It’s that time of year again – tax time! But this year, let’s do things a little differently. Instead of scrambling to get your paperwork in order at the last minute, why not take a more organized approach? As a financial expert, I’ve put together a comprehensive checklist to help you get your business in tip-top shape, not just for tax time, but for the rest of the year too. In this post, I’ll cover everything from reconciling accounts to reviewing your balance sheet and income statement. By the end of this guide, you’ll have a clear plan for keeping your business on track and thriving in these challenging times.

Business Review

A business review is a valuable tool for any company looking to improve its operations and increase profitability. By taking a close look at your financial statements, we can identify areas where your business is performing well and areas where improvements can be made.

We’ll start by understanding your business and its daily operations, including the type of business you run and your current sales figures. From there, we can work together to determine which services can be expanded upon to take your business to the next level.

For example, one of our clients tripled their sales in 2020 and 2021 by analyzing year-end reports broken down by segments and making informed decisions about sales and inventory. By taking a strategic approach to their operations, they were able to thrive even in the face of a challenging economic climate.

In addition to identifying areas for growth, a business review can help you ensure that your finances are in order and that you’re complying with all applicable laws and regulations. This can help you avoid costly fines and penalties, as well as improve your overall financial health.

Overall, a business review is a powerful tool for any business looking to improve its operations, increase profitability, and stay competitive in today’s marketplace.

Reconcile Accounts

Maintain accurate records of your finances by reconciling your bank and credit card accounts with your accounting transactions every month. This review ensures that all transactions match up with your bank and credit card statements and helps identify any lost checks, deposits, or unauthorized wire transfers. Additionally, it can help prevent any excess or unjustified bank charges and ensure that all transactions are posted correctly by your bank. Don’t forget to also reconcile prepaid insurance and payroll accrual accounts to make sure they’re up to date.

If you use point-of-sale applications like Square, PayPal, or QuickBooks payments to record your income, it’s essential to reconcile your revenue accounts. This can help identify transactions that are doubled and fees that aren’t being recorded, which is a common banking issue. Make sure that you’re keeping up to date with all of your reconciliations, including any unreconciled transactions from prior months. This will help you maintain accurate financial records and avoid any discrepancies.

Monthly and year-end review

To ensure accurate financial records, it’s important to review and reconcile various accounts regularly. Start by reviewing aged accounts payable balances and other current liabilities, including payroll and sales tax. Confirm loan balances and split the principal and interest correctly. Review owners’ draws versus business transactions to ensure proper classification.

It’s also important to research and ensure proper accounting treatment of funds received under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Make sure you collect W-9s for new vendors and enter their information before paying them. You can use the QB portal for easy management of vendor information.

At the end of the year, it’s time to do a physical inventory count. If you sell products, you need to know what you have in stock and what you’ve sold. Negative inventory can be a problem, and we’ll need to make necessary adjustments based on any variances. Be sure to determine the current value of your inventory.

Balance Sheet Review

Your business’s balance sheet provides a snapshot of its financial condition at a specific moment in time. This can help you quickly assess your business’s financial strength and capabilities. By analyzing trends in your receivables and payables, you can identify any issues and take corrective action. Are any of your customers not paying on time? Consider asking for upfront payments for service calls to avoid cash flow issues.

Our review can also determine if your business is equipped to handle financial ebbs and flows in revenues and expenses. By keeping track of your financial health on a regular basis, you can ensure your business is on solid footing to weather any economic challenges that may arise.

Both your balance sheet and income statement are crucial elements when it comes to financial reporting to potential lenders, investors, and vendors who are considering extending credit to your business. With accurate and up-to-date financial statements, you can demonstrate your business’s ability to repay loans and manage financial obligations.

Income statement Review

Performing a year-by-year income statement review can help businesses ensure that their income and expenses are being properly classified and that there are no recurring or unusual expenses that may require attention. This process can identify potential areas for improvement and help businesses make informed decisions about budgeting and planning.

Comparing budgeted and actual numbers is another important aspect of financial analysis. By comparing these numbers, businesses can identify any significant variances and adjust their budgets accordingly. This process can help to analyze the performance of individual departments or cost centers, making it easier to allocate resources and manage finances effectively.

For non-profit organizations, this kind of financial analysis is particularly critical, as it can help to track donations and ensure that grants are being used appropriately. By reviewing comparative reports and analyzing budgeted vs. actual numbers, businesses can make sure that they are using their resources effectively and working towards their financial goals.

IT & Back-up Files

Protecting your business’s data is crucial in today’s digital age. This is why we strongly advise creating regular backups of all important data and documents. By storing these backups on a flash drive or in a secure online storage service such as Dropbox, you can protect yourself against data loss resulting from hardware failure, natural disasters, or cyberattacks.

In addition, we recommend locking your accounting period to prevent any backdated changes to your financial records. This will help ensure the accuracy and integrity of your financial data, which is essential for making informed business decisions and meeting compliance requirements.

Finally, we understand that managing IT infrastructure can be a complex and time-consuming task. That’s why we work with trusted IT professionals to provide our clients with ongoing IT support and advice. This ensures that your business is always up to date with the latest security measures and technology advancements, giving you peace of mind and allowing you to focus on growing your business.

Conclusion

In conclusion, taking a more organized approach to tax time and year-end reviews can help keep your business on track and set you up for success in the coming year. By following the checklist I’ve provided in this post, you’ll be able to identify areas for improvement and make informed decisions about expanding your business. Don’t wait until the last minute – start organizing your business today!

If you’re ready to take your business to the next level and ensure a successful future, don’t hesitate to contact Teri Hayes Small Business Solutions. We can guide you through the year-end review process and provide tailored solutions to meet your unique business needs. Contact us today to schedule your consultation and start your journey toward success!