The end of the year is a hectic time for everyone, but business owners especially. The holiday season usually coincides with the busy season for a lot of service-based businesses. But the savvy entrepreneur knows setting aside a little time to wrap up current year tasks ensures you can start the new year off right.
We’ve put together this year-end checklist for small businesses who need a little guidance on what items they should be focusing on. While this list is not exhaustive of the many things you probably want to accomplish, it can serve as a good jumping off point. The main goal is to finish strong, organized, and ready for the new year.
Clean up your files
Your year-end activities should start with a basic clean up of your files. We are all guilty of throwing (maybe important) documents into our junk folders and ignoring them. Take a little time to go through your files – both paper and virtual.
Digitize the important paper files and shred the unimportant. Sort through your computer documents and make sure they are labeled accurately and in the correct folders. Check to see if you can purge any older files you no longer need (check out my blog post on record retention to double check you don’t have to hold onto them for a little longer).
Run your year-end financial statements
No year-end checklist for small businesses would be complete without this topic. You are probably running a few different financial reports throughout the year, but may be focused on the day-to-day rather than the year as a whole. Your year-end financial reports will give you the big picture about how your business is performing. These reports should include:
- The Income Statement
- The Balance Sheet
Check in with your accountant if you need a more in-depth explanation of how to put these statements together.
Reconcile accounts receivable
Make sure you’re getting paid! Your accounts receivable total is the amount your customers still owe you. And when you are running a service-based business, collecting that outstanding amount can be tough. At the end of the year, send a quick follow up to all outstanding accounts. Ask your accountant if you need help finding a collections agency for those extra stubborn customers.
Sort through your open payables
As long as you are checking in with your own customers, make sure you’re not a straggler yourself. Your vendors will probably be reaching out for updates on any unpaid invoices, but do your own check first. Many accounting softwares give you the ability to run reports to show how much you owe and to whom. Make an action plan on how you intend to address the debts.
Get your 1099s in order
Another vendor-related goal is to get the documents and information you need to prepare for sending out 1099s. These are tax documents you must send to vendors you paid over $600. Make sure you have a form W-9 on file for each vendor, along with their most recent mailing address and contact information. Reach out to the vendors whose info you’re lacking. 1099s are usually due to contractors by January 31st, so you don’t have a lot of time to work with after the year ends.
Audit your payroll & benefits
If you have any employees, the end of the year is a great time to do an audit of their payroll and benefits information. Put it on your year-end checklist for small businesses to check in with your employees to make sure their information is up to date and accurate. Go through your payroll and benefits providers and tackle any allocation corrections needed. See if there are any benefits your business isn’t taking advantage of or any that you no longer use.
Backup your information
Best practice is to backup your computer data frequently. But a lot of us don’t do it enough. Things like viruses and hardware failures can wipe out all of your important business data in the blink of an eye. And when your accountant can’t find the backups for all of your year’s work, you’ll be in hot water if an audit comes your way.
Set up a routine data backup of all of your computer’s files. Have a dual redundancy plan in place: store your backup on both a physical hard drive and in the cloud. That way if one of those copies gets erased, you have a backup for your backup.
Review and update your business goals
At North Shore Accounting Services, we love goal setting! Year-end is the best time to review your past goals and set your new ones. Quantitative goals will be goals related to hard numbers, while qualitative will be loftier and less tangible. Setting both kinds of goals will ensure you are reaching your growth milestones.
Take time for appreciation and gratitude
Last but not least on this year-end checklist for small businesses, take some time to pat yourself on the back. Whether this year was a struggle or a cake walk, you worked hard! You strived for your goals! Practice showing yourself gratitude and self-love for a job well done.
I hope this year-end checklist for small businesses helped you set a goal to finish out the year strong. For any help you may need from your accountant checking these items off your list for your service-based business, schedule a consultation today.