The end of the fiscal year means it’s time to wrap up your small business finances. This time of year is generally a bit slower for businesses and the perfect time to complete an end of financial year checklist for small business.
We’ll explain the important activities you should be doing to close out 2020. But we’ll also explain how to set yourself up for a strong 2021.
End of Financial Year Checklist Action Plan
Before you consider 2020 completely over, take these important steps to prepare for the new year. The more organized your 2020 books are, the easier it will be to start 2021 on good financial footing.
Here are the steps to ending your financial year for your small business.
1. Create a company financial report
Depending on how well you managed to document your finances throughout the year, this step could be pretty quick. Make sure you account for all expenses. If you’ve been putting away receipts all year long and planning to deal with them later, now’s the time to document those properly.
Find out how you can create wealth with this 4-step process
2. Evaluate your financial position
Now that you know your expenses and income, you should evaluate your financial position. Check to see if you have opportunities to reduce expenses and maximize income.
Get a good idea of cash flow so you can plan for how to manage your expenses in the upcoming year. The secret of wealth creation for small business owners is to maximize income. You can do this by lowering expenses and managing taxes.
Review whether you met your financial goals for the year. If not, make a plan for how to meet your goals in the upcoming year.
Finally, discuss your tax strategy with a business growth consultant. You might be missing out on legitimate expenses you can write off. With a tax expert, you can comply with tax laws while growing your personal wealth.
3. Plan for the new year
Now that you have a good idea of your finances for this year, you can set realistic plans and goals for the upcoming year. Think about how you’ll achieve those goals and set action plans.
4. Prepare your tax information
It’s best to seek accountant business advice for filing your business taxes. While you can do it alone, it might end up costing you more. That’s because you might be filing them wrong, missing information or omitting tax write-offs.
If you’re planning to hire business consulting services, you’ll still play a role in preparing your taxes. Pull together the following documents to prepare your tax consultant for filing your taxes.
- Last year’s tax return
- Bank statements
- Payroll reports
- Credit card statements
- Interest statements
- Rent, business mortgage and utility information
- Other supporting financial documents, as needed
5. Start wealth creation financial planning
The main benefit of owning a small business is the ability to develop your personal wealth. To do this, you need accounting and tax expertise. Take some time to find an outstanding advisor who can do more than just accounting.
Yeager Sherburne CPA and Growth Consultants offers small business accounting, tax preparation and wealth creation consulting. We’ll help you find opportunities to streamline your business and improve your profitability.
Schedule your free consultation now to experience what makes our financial services unique.