As we approach the end of 2014, many small businesses are looking eagerly at the potential in 2015. Knowing how to close out the year at hand is vital to starting your businesses off on the right foot in the new year. With five simple questions, you can make sure your financial books are in order, helping you to gauge the health of your business and plan with confidence.
Here are the five questions to ask as you plan toward a successful 2015.
- Do you have multiple businesses? Is your accounting and record keeping set up separately for each company, and kept separate from your personal finances? Making sure you have a clear picture of operations is Step One to good financial management for your business and your personal finances.
- Are your records current? Do your financial statements show, with certainty, where you stand in terms of cash, accounts receivable, accounts payable, net income and gross profit? Keep all records current and formatted in a clear, usable document that provides the financial data you need to know at all times.
- Have you remained up to date with accounting and tax filings? Have you been so busy that you’ve fallen behind on accounting and tax filings? Failing to stay on top of your accounting and taxes is dangerous to your financial health. It can expose you to costly penalties, prevent timely management decisions, and even keep errors or theft undetected.
- Were you surprised by a tax bill in the past year? Did you face an unexpected or large tax bill in 2014? Proper planning will keep you from being surprised when you file your taxes. If your books are a mess and you’re behind in your accounting, you risk losing hard earned money and facing avoidable penalties and interest.
- Are your accounts fully reconciled? Are you utilizing bank accounts, credit card accounts, loans, etc? Remember to fully reconcile all accounts. There are limits to the term during which you can dispute charges and banking activity. Your books should agree with your income tax returns to avoid costly discrepancies. And if you’re planning for growth, keeping your accounts reconciled can help you obtain the financing and enable you to accurately calculate gains and losses on future transactions.
How much work do you need to do to get your books into shape? As we approach the end of the year, take a moment to evaluate your financial health. If you see issues, get the help you need to catch up on these critical tasks. Remember, they’re every bit as important as dealing with the rush of day-to-day business.
Now is the time to embrace and implement strategies that can minimize your workload and keep your financial house in order in 2015. SJG specializes in accounting and bookkeeping for expanding and emerging businesses, so their owners can focus on their business. Call on us to help you handle the backlog.
