We’re nearing year-end and a very busy time of year when it comes to your books. While I realize that December is a busy time of year with parties, travel and days out of the office, it’s also a time to take a close look at the business. Here are a few things to you can do:
- Depending on your tax situation, you may want to make some payments/purchases this month or you may want to wait, but looking at your financial reports will help you decide. If you and your accountant have time, do a preliminary assessment (better to do this earlier in the year, but if you haven’t, see if you can swing it).
- It has been another challenging year financially for many. While you may not be where you want to be, you may be better than last year, which means you’ve made progress. Running a Profit and Loss or Balance sheet compared to the previous year is always a good idea, but sometimes it helps you to see that you’re moving in the right direction.
- Reconcile bank and credit card accounts – I know for some offices, it’s been a while since those accounts have been reconciled, but it will need to be done before your accountant gets your books for taxes. Why not get started now?
- Reconcile loan accounts (yes, you can do this – much the same way you reconcile your bank account). I find that there are usually a few issues on loan accounts:
- The entire payment amount is deducted from the loan balance instead of only the principle; this can be fixed with an entry on Dec. 31 if you don’t want to break it out for each month. You should receive a statement from the bank letting you know the balance on the loan and interest paid in 2010
- The wrong amount of interest was entered. Again, when you get the statement from the bank, you can enter either an adjusting entry to correct the principle and interest amounts, or you can edit each payment, whichever you prefer.
- Each loan payment was entered as an expense. I will admit that it is money out of the checking account and reduces your cash so it feels like an expense. However, the correct method is to reduce the amount of loan (which should be a liability account) by the amount paid on principle and only the interest is entered as an expense.
- Ensure that your 1099 information is correct
- Review your vendor list to see which ones are 1099 eligible. (Click on Vendors, Print 1099/1086) and then run the report in step 1 (Vendor 1099 Review) – this is just to make sure you didn’t overlook anyone. Keep in mind that just because a business has an LLC after their name does not necessarily exclude them from 1099’s. It depends on how they file their taxes (which you would not know), so it’s best to err on the safe side and send them a 1099.
- Make sure that the expense/cost of goods accounts you used to pay them are being tracked. Click on Reports, Vendors and Payables, 1099 Detail
- With a new year, it’s also a good idea to evaluate the products you’re using.
- Perhaps you need a different version of QuickBooks. While choice is nice, sometimes it’s confusing; I’d be happy to assist in the review. Intuit has some great deals for year-end!
- Maybe it’s time to find an add-on product that will streamline data entry or make some part of the business simpler – there are many choices. As an Intuit Solution Provider, I find that often I’m looking at options with clients
- If you want to want to make changes to payroll, you need to get information gathered – it’s easiest to make the transition at the end of the year. Intuit has some new options you might want to check out (I’d be happy to help you analyze).
You made it through a challenging year – congratulations! Assess what worked, what didn’t, and look for ways to improve. I hope next year is a year full of exciting opportunities for you.