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Salt Lake City Bookkeeping Blog

Year-end Checklist for the Small Business Owner

Posted by Matt Roberge on Oct 20, 2014 7:00:00 AM

Year end business owner to do checklistIt's that time of year again. Can you sense it? Year-end is just around the corner. The rivers are getting cold, the smell of fall is in the air, snow is starting to show in the mountains and everyone is getting excited for winter (at least our office is). However, there is a lot to do before year-end for the small business owner. Too many small business owners tend to kick back and relax as the year wraps up. For many business owners Thanksgiving through Christmas is a time to take a laid back approach to their business. Taking that approach leaves you behind in your business and that is no way to start a new business year. Here is a year-end checklist for the small business owner.

1. Review Bookkeeping

It is really important that you review your bookkeeping prior to year-end and clear up any outstanding issues. Make sure that your QuickBooks file is completely up to date and reconciled. You also need to ensure that you are in compliance with subcontractors and 1099's, ensure that you have all the proper documentation. Lastly, you want to review your asset accounts to ensure nothing is booked to an asset account incorrectly.

2. CPA Tax Consult 

I advise that every client have a tax consultation with their CPA prior to year-end. First, if there are any tax advantageous moves that you can make you will have time to do so. Additionally if you are going to end up owing a large amount in taxes you will have sufficient notice to make a plan to pay that balance. Nothing is worse than finding out you owe a lot of money in taxes with just a few weeks' notice. I always recommend that you have a tax consultation in early December each year with your CPA. You should bring them a QuickBooks file that is updated through November so you can resolve any questions you have and get a handle on your taxes.

3. Develop a Budget & Forecast

It is incredibly important to develop a budget for your small business each year. I recommend building your budget towards the end of Q4 each year but definitely before the year closes out. It is equally important that you enter that budget into QuickBooks and use it as a way to guide your business. Don't make the mistake of developing a budget and then tucking it in a file cabinet and never reviewing it again. You should be doing budget vs actual comparisons throughout the year to make sure you are staying on track. 

4. Review Your Organization

After you have attended to your financial year-end tasks you should take a good look at your organization as a whole. Take a step back from the details and look at your organizational chart from a far. 

What are your strengths and weaknesses?

What will be your needs in the coming year from an organizational perspective?

What gaps or opportunities do you see in your organization chart?

Taking a step back and looking at your organizational chart is a great way to define needs, as well as refine your long-term vision. 

5. Shop Major Policies 

Prior to year-end is a great time to shop your major policies. I like to review my insurance policies with our agent to look for any gaps in coverage or possible ways to reduce our rates. Looking at comparisons with other merchant processing companies is another area to shop and see if you can reduce your costs. With health care becoming a hot topic for most small businesses it is a good idea to review your health plan and shop with other carriers. 

6. Long-term Budget & Forecast

Reviewing and modifying your long-term budget and forecast is another item to attack before year-end. While developing a five year budget & forecast is a great idea it's a mistake to never modify it. If you don't revisit your long-term budget and forecast each year then that five year forecast becomes a four, three or two year forecast. You always need to be looking at the long-term financial plan for your business. 

7. Modify Exit Plan

If you said "what exit plan?" then we already have a problem. Having an exit plan in place for your business is incredibly important. Without a plan for exiting your business how do you think it will ever happen? Additionally how will you know when the time is right? Many small businesses don't develop an exit plan because they don't see the point of it. Having an exit plan in place is important and you should review and modify it annually as needed.

As the year winds down it may seem like a time to celebrate and relax. While it is important to relax there are a lot of tasks you need to do as a business owner prior to year-end. That way you hit each new business year running on track towards your goals. 

What other critical tasks do you handle before year-end each year?

Avoid Year-End Bookkeeping

Photo Credit © Dollar Photo Club / denisismagilov

Topics: Small Business Management, Year End Accounting, Small Business Growth, Year End Bookkeeping