Year-End Accounting Tips for Small Business Owners The phrase, “It’s that time of the year, again” sounds exciting and joyful, only if it’s around the time of Christmas. The same phrase can cause stress if it’s being referred to another time of the year that is Year-End Accounting. All businesses need to do their year-end accounting, be it small, medium, or large businesses. There is no escape. But there are ways in which you can handle it better by adopting a few simple steps. Here are some “Tips for small business owners to jump-start year-end accounts”: Outsourcing: The easiest and smartest way is to hire the right Outsourced Accountant to manage your Year-End Accounts. This step would help you in concentrating on your core business. It will also help in reducing recruitment, IT costs. Accounting Software: Choose the correct accounting software for your business and let the software do all the hard work. The accounting software allows you to keep business organized and mechanize processes such as reconciling and sending payment reminders. The software will also help
you to run the required financial reports. The key is to choose the right software which fulfils your business’s needs. Timely Invoicing: Timely invoicing is very important. Not only does it help in getting better cash flow for the business, but it also saves time with the year-end accounting. Invoice your customers evenly throughout the year rather than piling it all up towards the end. The right accounting software can assist in sending reminders for the payments etc. Track your Income & Expenses: Simplify your year-end accounting by keeping a track of the income and expenses throughout the year. By waiting for the last minute to track down this, not only are you creating more work towards the end and causing a choked bottleneck but also increases the chances of errors. Don’t wait. Start early. Reconcile: The word reconciles in terms of accounting simply means to compare your transactions with the actual receipts, invoices, etc. Reconcile frequently & regularly. Balancing your accounts and identify errors on a habitual basis is much easier as compared to waiting until it’s time to do your year-end accounts. Keep Private & Commerce Separate: Year-end accounting would require you to keep your personal & business expenses separate. Mixing personal and business accounts could lead to being flagged in auditing. Use separate bank accounts for personal use and a separate one for your business. Inventory Management: Managing your inventory at the start of the year and matching it with the previous year’s closing inventory is a good thing to do. Keeping your books accurate and ensuring that you do not run out of stock suddenly is an important step towards easing out your year-end accounts.
Reports: Getting the right reports with the help of the accounting software is very important in preparing the year-end accounts. Few reports which must be run and analysed regularly are the P & L Statements, Balance Sheet, Expense Report, Payroll Summary, etc. You can run other reports based on the financial need of your business to keep you informed well in advance, all required for Year-end Accounts preparation. Few tips can help small businesses to manage their year-end accounts better. The time is now to look if there is anything you should be doing to make sure that your business ends the year financially well. Planning is everything for a business to succeed. These tips can help businesses to plan before and plan well their Year-end accounts. We need to remember, that the well-known saying, Businesses that fail to plan, plan to fail, is indeed true.