How You Can Close the Books and Ring in the New Fiscal Year on Time
It takes 60 seconds for the ball in New York’s Times Square to drop 141 feet and officially ring in the New Year. That’s not a lot of time to consider all the things you want to accomplish in the next 365 days, let alone think about all the things you didn’t quite get to before 11:59 on December 31.
Nonetheless, as you’re contemplating your quarter-one goals, and why you didn’t quite get around to running that marathon, you don’t also want to be confronted by the things you could have done better or devoted more time to, including your year-end financial close.
With the end of the year so near, we’re giving you our top four pro tips for ensuring your books are closed well before the clock strikes 12.
Don’t Wait Until the Last Minute
Think back to your school days. Waiting to complete a project, write a paper, or study for a test the night before, while exhilarating, was always a huge gamble. So, now that you’re not as capable of pulling those all-nighters, you’ll need ample time to reconcile accounts, complete W-2s, and so much more. Prepare early, and don’t procrastinate!
As the year comes to a close, you’ll want to be at home with your family, not burning the midnight oil in the office. And with your teams hoping to take a little extra time off over the holidays, your business might have to function on a skeleton crew no matter what. Don’t let your books fall behind or get in the way of a successful fourth quarter!
Gather Your Financial Statements
Reach out to your financial institution for copies of your financial statements and records now — there’s still time! While you might be able to download statements and records online, you’ll likely need the assistance to get records dating back to the beginning of the year.
Once you’ve reached out to your bank, gather everything your accountant will need. That means you’ll have to draft an income statement that reports revenues and expenses over a period of time, and a cash flow statement that reports changes in your balances due to operating and investing costs.
Organize All Purchase Records and Receipts
If your current filing system consists of a small shoebox and a lot of enthusiasm, then it’s time to upgrade. Short of going through each scrap of paper by hand, you’ll need a reliable document scanner to keep everything organized digitally. Investing in a digital scanner means not having to worry about faded ink or water damage on old documents.
But, if you must keep that shoebox of paper receipts, do your part and keep everything in one place. If nothing else, upgrade from shoebox to filing cabinet and sort your documents by date, purchase type, or cost. We promise, something that seems as small as organization will mean the world to your accountant or bookkeeper.
Itemize Your Deductions
As you’re preparing your year-end financial close, don’t forget to think ahead to that other most-important financial day of the year. That’s right: Tax Day. Take stock of everything you have that might count towards your operating expenses, especially your vehicle and home office.
If you use your personal vehicle for business, keep a record of your total number of miles driven, reason for each trip, fuel costs, and dates. If you use your home office to conduct business, you can claim some expenses like rent, utilities, maintenance, and insurance on your tax return. In either case, your accountant should be able to help you calculate your deductions.
Is your software ready to ring in the New Year?
Closing the books for the fiscal year is a lot easier when you have accounting software that works with you. Don’t add any more stress to the year-end financial close because your software can’t keep up. Cougar Mountain’s Denali accounting software can keep your records and finances up to date, so in those final 10 seconds, the only thing on your mind is the prospect of a successful new year.
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