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Year End Checklist

Wednesday, 04 December 2013

Year End Checklist
Taxes and Business Planning Go Hand-in-Hand

What do we think of when we think of fiscal year end? Taxes! What else? That's why for businesses, year-end is the perfect time to do your business planning for the following year. You're already dealing with the books so why not do some analysis and make some decisions to ensure that your business prospers in 2014?

This year end checklist will help you get your income taxes in order and get your business planning off to a good start.

1) Get your financial books in order.

     Whether you're one of those solo entrepreneurs with a shoebox full of receipts or a small business person who has a bookkeeper on your payroll, you have to get this step done before you can do anything else.

     Get the help you need -- hire a bookkeeper and/or accountant if you need to.  

2) Determine your position.

     Next, figure out where your business is now.  Examine these three areas:

       a) Financial documents and analyze ratios.

           Prepare the standard three business financial documents that will be the basis of your decisions.

           The Balance Sheet is a financial summary of the business at a particular point in time.

           The Income Statement is a glance at whether or not your business is profitable at a particular point in time, resulting in a profit or loss.

           The Cash Flow Statement reconciles your opening cash with your closing cash for a particular period.  List and summarize your business's cash flow for each of these three areas:

            ·   Cash flow from operating activities - such as revenues and expenses

            ·   Cash flow from investing activities - such as assets purchased and assets sold

            ·   Cash flow from financial activities - such as loans and loan repayments

     Once you've examined your balance sheet, income statement and cash flow statement, check your business's total debt ratio and profit margin. It won't take long with your balance sheet in front of you.

       b) Goals from last year.

           Once you know where your business is, take a look at how it got here. Pull out your business plan and any other planning documents.  Did your business accomplish what you set out to do?  Make some notes about the accomplishment of your goals. These will be handy when you do your business planning for the current year.

       c) Current tax strategies.

           Investigate different tax strategies to maximize your business's deductions. Talk to a professional accountant and/or tax lawyer to get advice about which tax strategies would be best for your personal and business circumstances.

3) Plan for the coming year.

     You’ve done all the groundwork and you're ready to do some business planning.  

  • Set next year's goals.

  • Prepare an action plan or plans.

  • Start implementing your action plans.

4) Get your tax documents prepared.

     You can turn over the required documents to an accountant or prepare them yourself.   Check with your tax accountant for a list of the key records they will need to prepare your income tax.

That's It!

You know the cliché; businesses that fail to plan – plan to fail. Hopefully this year-end checklist has inspired you to get to it and make your business planning easier.

  



Last updated ( Monday, 14 April 2014 )


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