We’re heading into the final four months of the year, and if your bookkeeping has been something you’ve been meaning to catch up on, now is the time to stop putting it off.
Waiting until January to figure out what happened financially in your business can make it much harder to make good decisions before the year ends.
The good news? You still have time.Here are four things business owners should be doing now.
- Know Where Your Business Stands
Before the year gets away from you, take a look at your financials and ask yourself:
- Are you profitable?
- Is your revenue where you expected it to be?
- Are your expenses higher than anticipated?
- Are there areas where you're spending more than you realized?
You don't want to discover the answers to these questions after December 31. Knowing where your business stands now gives you time to make adjustments while there is still time left in the year.
- Make Sure Your Bookkeeping Is Up to Date
Take some time to make sure your books accurately reflect what's happening in your business.
Check to see:
- Have all of your bank and credit card accounts been reconciled?
- Are there transactions you're unsure how to categorize?
- Are there old outstanding invoices that need attention?
- Are there expenses that haven't been entered yet?
The longer these items sit unresolved, the harder it becomes to get an accurate picture of your business.
- Look for Anything Unusual
When reviewing your financial statements, don't just look at the bottom-line profit number.
Look for expenses or revenue that are significantly higher or lower than normal.
Maybe your:
- Insurance expenses increased.
- Advertising spending went up.
- Payroll increased because you added employees.
- Revenue changed significantly from previous months.
These changes aren't necessarily bad. But you want to understand them.
Your bookkeeping isn't just about recording what happened. It's also a tool that can help you make better decisions about what happens next.
- Start Thinking About What Your Tax Professional Will Need
The cleaner and more complete your books are now, the easier it will be to close out the year and provide accurate information to your tax professional.
You may also discover questions that need to be addressed before December 31.
For example:
- Should you make a planned purchase before the end of the year?
- Do you need to adjust your estimated tax payments?
- Are there equipment purchases, bonuses, charitable contributions, or other transactions you should discuss with your tax professional?
This doesn't mean you should make financial or tax decisions simply because the year is coming to an end.
It means you should start the conversation early enough to make informed decisions.
And If Your Books Are Behind… Don't Panic. If your bookkeeping is behind, don't beat yourself up about it.
Running a business involves a lot of moving pieces, and bookkeeping isn't always at the top of the priority list. But the solution isn't to keep avoiding it. Start where you are. Get your accounts reconciled. Review your financial statements.Identify anything that needs to be corrected.
And if you need help, ask for it before you're in a year-end or tax-season emergency.
The Goal: Start January With a Clear Picture. The goal isn't simply to check “bookkeeping” off your to-do list.
The goal is to enter January with clean, accurate books and a clear understanding of how your business performed during the year. Because accurate bookkeeping gives you something much more valuable than completed records: It gives you information you can use to make decisions. So don't wait until January. Take a look at your books now, identify what needs attention, and give yourself time to make informed decisions before the year ends.
Let us help - contact Affordable Bookkeeping & Payroll Services(opens in new tab) at 310-534-5577 or contact@abandp.com.
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