- Growing your way into bankruptcy In standard
Why is it at the end of every year everyone puts out a checklist of items they need to do before the new year begins? Are we not more creative than that?
Bah humbug. Checklists are boring! Let’s call it something different… the “Year-End Wrap Up”. Yes—that’s it!
Ok, it’s really a checklist, but humor me for a moment and let me think I’m doing something different than everyone else.
Here’s the Profit Point “Year-End Wrap Up”:
- Call your accountant—or fire them. If your accountant has not reached out to you by now– you need a new one. Call us for referrals to some very good ones. If your CPA has not called for your YTD financials or set up a meeting to plan for year-end they should not be part of your financial team. The good ones have been in touch all year long monitoring your progress and recalculating your tax liability as well as helped in tax planning throughout the year.
- Get your W9s, pretty please! Yes, we’re talking about those pesky little documents from every vendor that qualifies to receive a 1099 from you. On your tax return you now have to check a box that says you have sent all the required 1099s so save yourself the 11th hour headache and have your accounting staff make sure they have every required W9 from vendors—now. One way to make sure you get them is by holding all future payments until you have that hot little form in your hand. (That tends to get a response pretty quickly.)
- Messy books are expensive. There’s nothing like meeting with your accountant and getting slammed with a bill for them to clean up your books so they can make heads or tails of your numbers to file a return. If you are cash basis filer, please run your financials on a cash basis and clean up any AR and AP that is outstanding—they should not be there. Save yourself and your accountant the pain when it is crunch time.
- Make the call. It’s time to face the truth– you may never get money from that client, or you may never pay that bill. And that inventory you swore you could sell—well, unless your grandmother wants it, it’s time to book it to obsolescence. After speaking with your accountant (see #1 above) write off the old Accounts Receivable, credit out the old Accounts Payable and clean up your inventory. Your accountant will tell you if you should write it off this year or next.
- Pull out the crystal ball. What? You don’t have one? Ok, we’ll settle for an operating plan. If you haven’t already put together a plan for next year… ummm, you should. Not only is this a good practice to set the course for next year it will also help your accountant know what kind of year you are expecting so he/she can determine the most tax effective way to manage the above write offs—translation: which year you’ll get the most benefit.
So there you have it. Our 5 point obligatory year-end checklist, um.. I mean Year-End Wrap up! Have fun with it or—if it is TOO much fun for you, talk to your accountant, bookkeeper or us if you need help with any of the above. Happy Holidays!