Year End Small Business Accounting Tune Up (Update)

December 19, 2016 by Ed Becker

As a small business owner, you know that December isn’t just about holiday festivities and the holiday season. December is also another year end accounting season. It’s when you need to compile and prepare end of year documents for your CPA, so they can file everything for you before the upcoming deadline.

Which accounting documents will your CPA need?

The exact list depends on your type of business, but most businesses will need the following:

• W-2 forms- ensure all employees, even non-current, have updated addresses.
• K-1 forms of Trusts/Estates, Partnerships, or S-Corporations.
• All 1099 forms: 1099-MISC, 1099-INT, 1099-DIV, consolidated 1099, 1099-R, 1099-B, 1099-SSA, 1099K if you use 3rd party or merchant accounts. New filing dates are in effect for this tax season, most all 1099’s are due by January 31st.
• Cost Basis on all stock sales
• Business Income and Expenses
• Rental Property Income and Expenses
• Itemized Deductions
• Estimated payments worksheet

Once you have your documents in front of you, start by creating your own personalized checklist. This will make the process easier and faster. The more organized your documents are, the more money you will save in accounting fees, and the faster you will be able to have your return prepared and filed.

The following checklist can be copied and printed for ease of use. You also can edit it for your specific needs prior to printing.

Sample Small Business Accounting Tune-Up Checklist

• Reconcile your bank account- include PayPal and any other similar accounts that are treated as banking accounts
• Clean up unpaid and outstanding invoices
• Collect all W9’s from vendors or outside contractors
• Record Transactions (credit card purchases and receipts)
• Verify your inventory balance
• Categorize Expenses and Income properly or ask your CPA for help
• Record any sale or disposal of fixed assets
• Review Mileage logs & vehicle expense documents
• Pay Your Estimated Taxes to avoid penalties when taxes are due in April
• Check your Income Statement and compare it to last years for unusual fluctuations
• Record any year end accrual entries – and depreciation
• Verify Accounts Receivable and Accounts Payable
• Adjust for bad debt write offs
• Reconcile your payroll taxes to your payroll returns
• Prepare a budget for next year utilizing your profit and loss statement from the year that is ending
• Back-up all your files to prevent lost data

And remember: maintaining accurate records and staying current with bookkeeping throughout the year, make compiling these documents and data much easier. Outsourced bookkeepers can be a great resource now because they know what CPAs truly need to compile by the end of the year.

With a bookkeeping professional organizing your books at the end of the year, you free up your capacity to become more productive and more competitive.  You can focus on the business tasks that are most important to you.  Plus, with your end-of-year bookkeeping off your mind, those holiday parties will be a lot more fun.