For a variety of reasons, the end of the year is a busy time. Preparing for the holidays, spending time with family, and making plans for the new year keep most of us busy from December 1 to January 1. You have an even more extensive list of things to consider as a small company owner towards the end of the year. Financial statements, taxes, and employee incentives are all on this list.
It’s not always simple to stay on top of all the year-end preparations you should be doing to close up 2021 and start planning for 2022.
Taking stock, preparing, and planning are all critical aspects of running a successful business. After all, what gets measured becomes better. This assessment will assist you in realigning your goals and resources so that you can capitalize on new possibilities.
Small Business Checklist – End of The Year:
Make a list of your most important financial documents:
Financial records are critical to the success of any business. There are three advantages to reviewing your financial paperwork. First, it tells you if you’re operating a healthy company or whether you need to tighten your belt in the future. Your records should include information about your company’s assets and liabilities, earnings and costs, and cash flow and should serve as a reference to its financial condition and health.
Financial records show you where you need to make changes and how much you need to change. Third, if you’re looking for investment, expansion, or mentorship, financial paperwork is frequently necessary to show prospective parties your company’s financial records.
Without continual data and information flow both internally and externally, no organization can exist. All of your company’s files and data should be adequately cataloged and backed up in a secure location.
Client information, meeting notes, emails, images and videos, briefings, research materials, and so on are examples of this data. You may do this in two ways: one, by storing them on a cloud-based storage system, and the other, by keeping them on an external hard drive.
Also, keep in mind that your contact list is a type of data that should be cataloged and backed up appropriately. The review of your firm’s information and data collection, which I refer to as documentation management, is just as essential as the financial management of your company at the end of the year.
Analyze cash flow statements
A cash flow statement shows how you spent your money over the year. Inflows of cash equal income. Business costs are cash outflows. Your objective is to make more money than you spend. It’s a good idea to look through your cash flow statement at the end of the year to see how cash flow has changed over the year.
Prepare Your Year-End Balance Sheet
You may use a balance sheet to see if you’re in black or red. It does this by comparing the value of the company’s assets to its liabilities. Physical inventory, property or equipment, trademarks, and bills that need to be collected are all the business’s assets. The company owes debts such as pension payments and unpaid bills. This comparison will help you decide whether you should cut costs or invest in your company’s growth.
Get Your Tax Documents Together
While it may not be tax season at the end of the year, gathering your tax paperwork is a good idea. You should fill out your small company return using the financial data you created in the previous stage. However, you may be required to complete additional tax forms, such as:
- Form 1099-NEC and Form 1096
- W-2 Forms and W-3 Forms
- State and federal payroll returns annually (Form 940) or quarterly (Form 941)
Double-check payroll and benefits:
It’s preferable to remain on top of any payroll concerns or fixes before the end of the year. Make that taxable fringe benefits, such as third-party sick pay or a company automobile, are considered. Educational reimbursement, health, life insurance, and transportation subsidies are perks that are sometimes overlooked.
Think about year-end incentives:
The end of the year is a terrific time to thank your staff for their hard work over the previous year. This incentive may take the shape of paid time off for the entire company, flexible scheduling, and, yes, monetary rewards. As you enter the new year, a year-end incentive of any kind is a great approach to enhance morale and promote employee satisfaction.
Examine your staffing needs:
Take an inventory of your staff to see if you’ll need to hire more people in the coming year. You’ll want to make sure you’ve budgeted for any new employees you’ll need in the first or second quarter.
On the other hand, your company’s requirements may have altered during the year. If your team is overstaffed, consider creating new positions to reallocate people. To better meet your company’s demands, you may also consider lowering hours or altering schedules.
It’s necessary to examine the goals for the current year before plunging into plans and activities for the new year.
Examine these strategies using the financial reports and statements from the previous year’s conclusion.
Examine your business plan and other associated documents for the current fiscal year to get a thorough and accurate picture of where your company stands.