Taxes

5 Year-End Accounting Tips for Your Business

MileIQ Team
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It's the start of a new year, so let's resolve to make this one better than last. One way to do that is to ensure your accounting is in tip-top shape. Here are 5 year-end accounting tips you want to make sure are done before this time next year.

1. Bring your books up to date

It's crunch time. As the year comes to a close, you'll need to bring any outstanding bookkeeping up to date. It's easy to let reconciliations slide when you're busy and year-end is still months away. But, now is the time to sit down with your bookkeeper and bring everything back up to date.

This not only prepares you for closing your books for the year, but it also helps to give you a strong understanding of your business' current financial situation. Maintaining up to date books with your bookkeeper will also cut down on your year-end accounting costs. It will also help you keep your records in shape in case you ever face a CRA audit.

2. Review your financial statements

Once you and your bookkeeper are confident that your books are all up to date, it's time to review the financial health of your business with your accountant. Your bookkeeper can help provide you with financial statements such as profit and loss statements, balance sheets and cash flow projections.

Your accountant can help you review your financials, making suggestions that will help your growth in the new year. These strategies may include deferring income, making purchases or contributing to a retirement plan.

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3. Close your books

Now that your books are up to date and you have a stronger understanding of your current financial structure, it's time to close your books for the year. Take the time to review your Chart of Accounts with your year-end accountant.

Closing your books provides you with an opportunity to clear out the clutter, both physically and electronically. For example, closing out old accounts gives you the opportunity to clean up outdated customer accounts, inactive vendors and even old bank accounts.

4. Prepare for the new year

Once everything is up to date, you'll have a clean slate to begin planning for a financially stronger new year. Your financial statements and analytics will have given you a better understanding of your current financial structure, your previous year's finances, and a potential budget for the upcoming term.

By planning ahead for tax payments, and identifying significant expenditures and estimated income for each month, you'll be better able to gain an insight into potential issues that may arise throughout the year.

5. Reevaluate your accounting process

Year end is a great time to sit down with your bookkeeper and accountant and reevaluate your current processes and systems. Are you satisfied with your accounting software, your processes and your financial analytics? If yes, congratulations! Pour yourself a glass of holiday cheer, kick back and relax.

If you aren't, the new year is the ideal time to consider switching bookkeeping services or taking advantage of new technologies to improve the way you work. Cloud-based accounting software helps streamline and automate your bookkeeping processes, saving you time and money.

With apps and software that make automating your business expenses easier than ever, your new year can provide you with a fresh start for a prosperous new year.