The new year is almost here. It is time for your year-end bookkeeping but also to start planning for the next year.
There are bookkeeping tasks that need to be taken care of no matter what time of year it is.
Many people only do their bookkeeping once a year for taxes but that is the equivalent of running your business blind.
The key is that you need to understand what bookkeeping tasks you should be worried about, no matter what time of year.
Bookkeeping Tasks To Pay Attention To Every Time Of The Year
- Ongoing Bookkeeping Tasks
- Tax Time
- Year-End Bookkeeping
- Understanding Your Bookkeeping Cycle Year-Round
1. Ongoing Bookkeeping Tasks
I wanted to start by talking about bookkeeping tasks that you should be doing at least once a month, if not each day or week.
Below you will find a list of the essential bookkeeping tasks you need to worry about all the time.
Day To Day Activities
The day to day bookkeeping activities you need to take care of are the transactions that occur in a business's financial world.
You will need to track money going in and out of your business. So you will have to manage your accounts payable and keep your vendors paid.
Then on the money coming inside, you have customer invoices, payments coming in, and bank deposits. Think of the day to day bookkeeping tasks as the things that make the finances of your business tick.
Reconcile The Books
All of your day to day activities need to be reconciled at least each month if not each week. Reconciling QuickBooks is the most crucial bookkeeping task of each month because it is the only way you know you have accounted for all of your activity.
Make sure you reconcile all of your accounts, not just your bank accounts.
Any account that you get a statement for that has a statement date, beginning balance, and ending balance needs to get reconciled.
You should reconcile all bank accounts, credit cards, loans, lines of credit, and even payroll liabilities.
After your books are closed for the month, it is essential to go through some financial reporting and analysis.
There is no point in keeping up with your bookkeeping if you are not going to use your financial system as a tool to make business decisions.
You need to measure your financial results to make sure you are reaching your goals, and so you can make adjustments to keep on track.
2. Tax Time
Submit The File To Your CPA On Time
Once you are ready to file your taxes, you need to send your QuickBooks file to your CPA.
Don't wait until March or April; get your file to your CPA as soon as your books are closed for the year.
If you are keeping up with your books each month as described above, then all you need to do is close out the December activity.
Closeout the year and get your QuickBooks file over to your CPA as early as possible in January.
You don't want to start your new year focusing on taxes; you want to focus on making it the best year for your business as possible.
Adjust Bookkeeping To Match Tax Return
After your CPA goes through your bookkeeping and files your tax return, there are likely to be some adjustments you need to make.
You can either have your CPA make adjustments to your file via your accountant's copy, or you can ask for the journal entry adjustments and make them yourself.
Either way, you should be sure that your QuickBooks file matches the tax return that was filed.
3. Year-End Bookkeeping
At SLC Bookkeeping, we don't believe in year-end bookkeeping. At year-end, you should be so organized that you shouldn't even have to be worrying about bookkeeping.
Make sure to have a tax estimate or assessment before the end of each year.
I good idea is to close out November as early as possible and then schedule a tax review with our CPA in early December of each year. Then receive a tax estimate and have your CPA help you decide if there are any advantageous tax moves you need to make before year-end.
Additionally, if there is an estimate of a tax amount due, at least you have four months' notice rather than just a few weeks.
Budget And Forecast
You should work on and finalize your budget and forecast for the upcoming year before year-end.
Start on your budget and forecast early in the fourth quarter of each year. Then aim to finalize the budget by December.
Lastly, enter your budget into QuickBooks before the end of December so that you hit the new year running.
Rather than worrying about budgets and bookkeeping at the beginning of the new year, stay completely focused on sales and growth.
As you can see no matter what time of the year it is there is always some sort of bookkeeping task you need to be taking care of.
By keeping up with your bookkeeping, you will develop a sound financial system that you can use as a tool.
4. Understanding Your Bookkeeping Cycle Year-Round
The critical thing is to understand your entire bookkeeping cycle so that you know what tasks to be doing at each point of the year.
Are you having issues trying to stay on top of your bookkeeping activities while growing your business at the same time? Ready to onboard your bookkeeping expert team and take the pressure and liability off of you and allow you to focus on the growth and management of your business?
Get started by scheduling a financial consultation of your business.