As 2019 draws to a close, its time to start checking items off of the small business year end checklist. It’s also a great time to create some strategies for 2020 so that handling 2020’s small business year end checklist is a much easier task. Even the IRS has some strategies.
Whether you are a DIY business or you outsource your bookkeeping, having a small business year end checklist can save you money, time and potential headaches later on. There are 7 items you need to complete to transition to a new year. We are going to review all of them in this article. Completing these 7 items is even easier if you keep up your business finances all year. The easiest way to stay on top of your business finances is to do them monthly. If you can’t do them monthly at least do them quarterly.l This also helps you keep your finger on the pulse of your business. So with no further ado…
Small Business Year End Checklist
Ensure your bookkeeping is accurate and up-to-date
This is one of those items that ideally you or your bookkeeper is doing year round routinely. If not, then its the first order of business for year end. Once all your transactions are entered into your accounting software, best practice is to reconcile against your statements to ensure accuracy. This is a great time to double check the accuracy of the classifications assigned to each transaction.
Pause and reflect on the past year
So often as a busy business owner, you can get caught up in your day to day activities. Ofter you spend more time reacting to the events in your business and can find yourself spending more time on less productive areas and less in the areas that create the most revenue. Year end is a great time to look back and reflect on what you did right, what you could have done differently and perhaps, what you ought not to have done at all. Really focus on what brought not only profit but joy to you over the past year and spend a moment identifying what created stress in your business.
Set SMART goals for the upcoming year
Goal setting is one of the most overlooked small business year end checklist items. SMART goal setting takes goal setting to a new level. Ensure your goals are SMART or:
- SPECIFIC – For instance, I want to increase the lifetime value of my customers by introducing a symbiotic product line, or I want to increase margins by 5% by lower costs.
- MEASURABLE – You need to be able to measure your results finitely.
- ATTAINABLE – Set goals that are attainable and not so lofty as to never be hit. Increasing sales by 5% is more attainable than doubling sales in the first quarter
- RELEVANT – Focus your goals on what is going to improve your business most.
- TIMELY – Give your goals an attainable but definite timeline and deadline.
Create a Budget
Year end is a great time to create a budget for the coming year. (Yes, we said “Budget”!) While you have your Profit and Loss statement in front of you, you can forecast out what you may need to spend on advertising, materials, payroll, utilities, insurance and other necessities. Make sure your budget aligns with your
SMART Goals in the previous step of this small business year end checklist. Include key personnel in the development of your budget.
Take Inventory
This is a fantastic time to true up your inventory, take stock of your computers, printers and office supplies. Match your inventory against your balance sheet to check for errors.
Complete a review of both your Accounts Payable and Accounts Receivable
Make sure you’ve paid everyone who needs to be paid and perhaps more importantly, that every own who owes you has paid you. This is a good time to potentially offer people who have owed you for a long time, a discounted repayment if they pay your before the end of the year. This will also help you with creating your budget.
Tax Planning
The best time to strategize for paying the least amount of taxes legally is BEFORE the end of the year. If you are sporting a healthy net profit and you have software subscriptions or materials you need to purchase, you can do so before the end of the year and eat up a little of that profit. You can put off sending invoice to customers until after the new year if need be. The point is get with your small business consultant or accountant before the year is over.
If you need help achieving some of the items on this checklist – I hope you will reach out to us! We’d love to help!