With the holiday season around the corner, there are a ton of notable and exciting days to come. Amongst those is the mark of the new year. For many, this means going out with friends and family, partying all night, and starting fresh with a new outlook on life. People view each year as a reset for their life, and personal opinions on that concept aside, it truly is a reset button for your business. Books close, revenue and expense accounts shoot back down to zero, and it’s time to analyze and develop new strategies to make the new year the best for your business. For all newly-formed businesses out there, the goal of this blog is to give you a little bit of insight on how to go about a smooth transition preparing for the new year.
First Steps: Preparing for the New Year
Your bookkeeping and/or accounting department will feel a heightened sense of job security throughout the first few months of 2019. Although your bank accounts should have been reconciled regularly throughout the year, account balance verification still needs to be done. Your accounting staff will then work on preparing the tax returns, which is much less daunting for everyone with some verification and audit tasks. This will likely include backtracking through some bank statements and doing sampling tests at least, and more can always be done. These tasks will ensure accuracy on your tax returns by allowing your accounting department to backtrack and find potential mistakes in your records. Do note that these types of tasks should technically be handled by internal or external staff who were not involved in bookkeeping tasks throughout the year to maintain proper internal controls and avoid fraudulent activity and ensure quality output.
Preparing Your Financial Documents for the New Year
Once your bank verification is completed, it’s time to prepare your financial documents for tax time. Your tax filings are obviously the most important piece of the pie in the short-term. You will need to send out 1099s and W-2s, prepare various local and federal tax forms, and pay any other fees depending on your company’s location. That said, while I don’t necessarily care to get into the tax stuff, there is another fundamental purpose of these documents: financial analysis. Your end-of-year financial reports and other accounting data provide a perfect data set to analyze business and financial processes, generate custom reports to promote growth, create projections and budgets, and most importantly, determine goals. Doing these analyses is no easy task and it would potentially be best suited as an outsourced activity, but it is imperative that it gets done if your company wants to be the best it can be.
Enjoy the Holidays, Completely Prepared
The holiday season is one of the most fun, exciting, and stressful times of year on all ends, including your business. While you might end up spending more money on your accounting and financial teams’ paychecks than gifts for your little nieces and nephews, it can be an extremely exciting time when your plan for the new year begins rolling out. So make sure that you set yourself up for success and buy yourself some gifts for once in the form of tax-season peace of mind and high-quality financial and strategic development.
