We’ve all heard the old quotes about time like “Time waits for no one,” and “There is no time like the present.” It is true that time matters a lot. And in business, the time taken to plan and prepare in advance is critical to achieving success. It is amazing to think that the autumn season is already upon us and that means that it is indeed time to make important financial preparations as the end of the year approaches.
Why Planning Ahead Matters
Timely advance financial preparations will allow for:
- Better ability to assess business opportunities and risks, paving the way for growth and success.
- Finding ways to improve business performance.
- Better developing team members and securing improved teamwork.
- Allowing time to revise and strengthen business plans.
- Meeting required deadlines, including critical tax filing deadlines.
- Not rushing helps avoid hasty errors, critical omissions, stress, and fatigue.
What Are Important Autumn Accounting Tasks?
Start important end of year financial preparations now using these actions to avoid any last-minute hazardous scrambles:
- Make sure that generally accepted accounting principles (GAAP) are followed so all financial records are “clean.” This will ensure that the company’s financial position—both present and past finances–can be watched to enable accurate forecasting of the business’ financial future. Keep financial statements organized and accurately maintained, including the income statement, cash flow statement, and balance sheet.
- Review all outstanding invoices and strategize the best way to collect all accounts receivable in a timely manner before the end of the year. That may include setting up payment terms and creating payment plans for some customers.
- Organize and record all business receipts.
- Accurately account for all inventory. Assess inventory needs and plans for optimum quantities.
- Carefully analyze cash flow to see where any vulnerabilities lie and establish a means to improve the flow of cash. Are there ways to conserve cash such as reducing/eliminating expenses or delaying payments? Determine a way to establish a “cash reserve.” Re-evaluate the status of company budgets and determine if changes are necessary to match cash flow conditions.
- Regularly reconcile bank accounts to ensure that accounting records match bank records.
- Review payroll accounts to ensure that raises are planned and accounted for as well as year-end bonuses. Ensure proper recording of benefits and withheld amounts.
- Process all required forms, ensuring that W-9 and W-4 forms are on-hand and 1099’s are sent out.
- Prepare to file all required taxes or prepare to make advance payments, paying attention to all deadlines. This is the best way to minimize payments, capture any potential savings, avoid surprises, and stay out of trouble with tax authorities.
Clearly, advance financial preparations are much better than “winging it” at the last minute.
Avoid These Common Accounting Mistakes
Good accounting practices and effective financial preparations include not making mistakes like:
- Lacking accounting organization.
- Not following professional accounting processes nor keeping accounting processes on-schedule.
- Failing to reconcile accounts.
- Ignoring or not recording small transactions.
- Not backing up financial data.
- Working without or with informal budgets.
- Failing to properly categorize income and expense entries.
- Trying to meet all the accounting requirements and being on-top of financial preparations without professional assistance.
Get Expert Financial Assistance That You Can Rely On
Contact Doerhoff & Associates, CPA, based in Jefferson City, MO for professional accounting and financial assistance that you can count on. Doerhoff & Associates has one goal in mind, to provide comprehensive business accounting services designed specifically for your success.