With tax season just around the corner, a lot of small businesses feel overwhelmed or out of their depth. This is completely understandable considering the laundry list of tasks that go into filing a tax return.
It’s for this reason that we’ve decided to make things easier by creating a small business year end checklist that covers all the essentials. This way, small businesses know where to start when it comes to tax planning as, after all, April is closer than you think.
On that note, let’s dive into the small business year end checklist!
1. Collect and organize financial data
For any small business to be tax compliant they have to get one thing right – their financial numbers.
To ensure this information is correct it’s crucial to go straight to the source. Which in this case, is your accounting tool of choice.
Be it a formal solution like QuickBooks or Excel spreadsheets, this is where you’ll find a record of everything from accounts receivable to payroll expenses.
Once you’ve gathered this information, it’s time for some leg work as you’ll need to create a financial report that includes:
- A profit and loss statement
- Balance sheet
- Cash flow statement
Equipped with this information, you can look at how your business performed financially and can confidently report financial figures to the IRS.
2. Review company performance
Now that your financial data is organized, it’s time for some introspection. Hence the second item on our small business year end checklist – review last year’s company performance.
The first question to answer here: Did your company meet its business goals last year? For financial goals, your profit and loss statement will give you an answer pretty quickly.
Objectives that are harder to quantify such as team efficiency and brand awareness will likely require some internal collaboration to evaluate but are still worth looking as you set business goals for the next financial year.
3. Action areas of opportunity
With insight into which business areas thrived and which underperformed, you can now strategically plan for the year ahead.
Looking at the initiatives that contributed the most to revenue will let you know which tactics are working and should be double-downed on. Likewise, your analysis will reveal which initiatives are no longer worthwhile. And for most of us, there will be more than a few of these.
By taking a step back and evaluating the fruits of your labor, you can pinpoint which optimizations to action to make next year your best financial year yet.
It’s tax filing time
Congrats, you made it through our small business year end checklist!
Which means it’s time to file your taxes.
Our advice is to get the ball moving well in advance of the IRS’ April 15th deadline as not only will you be less stressed, but you’ll get any refunds you’re entitled to faster. On the flip side, if your business owes money, you’ll have more time to plan for this expense and can space out your payments.
So what are you waiting for? It’s time to start crossing items off this year end checklist!
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Image credit: Glenn Carstens-Peters via Unsplash