Business

A Fantastic Free Small Businesses End-of-Year Checklist

It’s year end. What’s one of the first things that spring to your mind? Taxes?

Many business owners find themselves immersed in tax and financial management at the end of the year and get so involved in the process that they can no longer see the wood for the trees. As such, year-end is often not the ideal time for organizations to embark on their business planning for the coming year.

However, if handled well, you can use the year-end mayhem to undertake some research and make better-informed decisions to guarantee that your business thrives in the future year. This year-end checklist for small businesses will assist you in completing your income taxes while also kicking off your year-end company planning and strategy development.

  1. Organize your financial records

The extent to which you find it difficult to get your books in order will be directly determined by your level of organization during the year. Whether you’re a sole entrepreneur with a glovebox full of receipts or a business owner with a bookkeeper on staff, you must ensure your financial records are well organized before you do anything else. If you don’t know where to start or simply don’t have the time, secure the services of an accountant or bookkeeper.

  1. Understand your current financial position

Having got your finances in order, you can then progress to the next step of the small business year-end checklist, which involves determining where your company is right now. You should look at your financial records in depth. To begin, create (or have someone produce) the three typical business financial records that will serve as the foundation for your holistic analysis.

  • A balance sheet is a snapshot of your company’s financial situation at any given point in time. It displays your whole financial picture, including all of your assets, obligations, and equity.
  • The income statement (also known as the profit and loss statement) itemizes your revenue costs over time and allows you to understand whether your company is profitable at a glance.
  • The cash flow statement shows you where the money has gone by reconciling your initial cash with your closing cash for a given time. List and summarize your business’s cash flow inputs and outflows for each of these three categories to generate a simple cash flow statement for a certain time (such as the previous year). This will show you the net growth or loss in cash in your firm throughout that time period, as well as where the money went at a glance.
  • Look at opportunities to save money in your fixed and variable costs. For example business insurance is a large fixed cost, by comparing quotes online you may be able to reduce costs or get more cover to suit expansion into the new year.

Check your company’s current ratio, total debt ratio, and profit margin after you’ve gone through your balance sheet, income statement, and cash flow statement. This will provide you with a clearer view of your holistic financial situation.

  1. Set your goals

Examine your previous year’s objectives. Now that you know where your company is at this point in time, it’s time to consider how it got there. Review last year’s goals by pulling out your company strategy and reviewing any other planning documents, such as last year’s action plan.

Is your company accomplishing what it set out to do? Why do you think that is? Make a list of how you performed this year. These will come in helpful while you embark on the task of setting out your current year’s plans for 2022 (we’ll go into more detail on that shortly).

  1. Identify potential tax-saving opportunities

Examine your existing tax methods. From income splitting to maximizing your business’s depreciation claims, there are tax methods that corporations in the United States and Canada may use to reduce the amount of income tax they pay.

Which of these tax methods have you used, and how successful were they? Examine various tax methods you haven’t considered, such as converting your firm to a corporation. Consult an expert, such as an accountant or a tax lawyer, for guidance on the optimal tax solutions for your personal and company situations.

  1. Make your 2022 New Year’s Resolution

All the steps you have taken in this small business checklist so far will lay a solid foundation that will help you to start planning your business. You are now in a good position to perform the following activities:

  • Make a list of your objectives for the coming year.
  • Make a plan of action as to how you intend to achieve these objectives.
  • Delineate the exact steps you will take to put your plan in motion.
  • Make sure you’re setting realistic, measurable, specific, tangible goals that will assist you to achieve your objectives. Your year-end goals should be in line with your long-term company ambitions and strategies.
  1. Get your tax submission ready

You have the option of hiring an accountant or doing your own income tax preparation. Regardless of which approach you opt for, you will need to have all the financial records related to your operations available, including invoices, bills, income statements, bank statements, and expense receipts. Getting all the data you need can be streamlined if you use cloud-based accounting software that allows your accountant to access your business information immediately online. If you’re unsure about the tax rules for small enterprises in New Zealand, your accountant can assist you.

Also Read:  More How to Resolve Error [pii_email_cbd448bbd34c985e423c]

We all know that old adage: Fail to plan, plan to fail. It simply couldn’t be truer than it is in the business context. As a small business owner, you’ll likely be juggling multiple balls, and it can be very difficult to find the time (and head space) to make firm plans. However, it is very important and can lay a solid foundation for your success in 2022. Don’t put the planning process off any longer. This year-end checklist will motivate you to get to work—while also making your planning a bit simpler. You’ll thank yourself for it when 2022 comes around.

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