The end of another year is fast approaching, is your accounting system ready? There are some basic things you should do to avoid the last-minute crunch.
- Review your vendor list and make sure you have W-9s from all vendors that might need a 1099. You can check out our 1099 article for more information on this.
- Complete your bank and credit card account reconciliations. If you are not current on bank reconciliations, this is important to do. Reconciling your bank account helps with finding transactions that may be missing from your records so that at year end your financials are complete. Timely reconciling is also important because banks and credit card companies make mistakes. If you find the mistakes and report them within the appropriate time frame the company must address it. Wait too long and you could be out the money.
- Review your financial statements. Run financial statements – Profit & Loss and Balance Sheet and compare to last year. Are the numbers similar? This can help you catch items that may have been miscategorized. It can also help in planning if there are dramatic changes that may impact your business longer term.
- Compare your actuals to your budgets. You should be doing this on a regular basis to help in planning. If you haven’t been, now is a good time to start and make this a regular monthly or quarterly habit.
- Prepare your forecast. Look at where you are year to date and what you need to do to achieve your year-end goals. Prepare your forecast for the following year or two.
- Contact your accountant. You should be in touch with your accountant regularly during the year, especially when making a significant purchase or financial activity. As the year end comes to a close, it is a good idea to check to see if there are any changes in the company situation that may make certain actions beneficial. There are often actions that can be timed to benefit the company from a tax perspective. Maybe you are thinking of getting new computer hardware. Based on your current financials your accountant can help decide if you should do it this year or defer to next year if practical. Similarly, the accountant can help you be prepared for your year-end cash needs like pension payments or other expenses.
- Review your Accounts Receivable and take proactive action on any older open AR balances. While you should be doing this regularly, now’s a good time to do an extra check and make sure you aren’t leaving money on the table. Remember, the longer you wait to collect the harder it is.
- Review your WIP and make sure you have billed everything you should. Waiting to bill costs you money so this should be checked regularly but now is a good time for an extra checkup.
- Review your chart of accounts. Businesses often setup a chart of accounts and never change it, even if the business changes. Make sure your chart of accounts is working for you. If changes need to be made, start planning for those changes which could be implemented now or in the new year.
Your accounting system offer many reports to help with these actions. If you need help in getting the right reports, understanding the numbers, or making changes, now is a good time to reach out to our experts at 3545 Consulting-Global.
About 3545 Consulting – Global
3545 Consulting – Global provides comprehensive, technology solutions, tailored to empower law firms to work smarter and more efficiently. Our dedicated team of experts get to know each client and their personnel, to gain a thorough understanding of how their law firm operates. We listen to your needs and ask the necessary questions to find customized solutions within your budget that will improve processes and help you effectively run your business.