I was in Paris two weeks ago and saw Champs Elysees all lit up for Christmas. People have been thinking about gifts, vacation, even their Christmas trees at home. If your business year ends on December 31st, it is also time to organize and carry forward your bookkeeping into a new fiscal year.
Time to catch up with your invoices. A list of customers with outstanding balances should be generated for year-end. Your Accounts Receivable balance must correctly reflect the outstanding balances owed to you. Applicable sales taxes must also be reported and paid to your proper government authority at the appropriate reporting period and deadline.
Make sure your business expenses have been properly categorized. Also check if there are any expense transactions related to your business that were paid from your personal bank account. If you don’t record your business expenses properly, your financial reports will show a higher profit and you will end up paying more taxes. A list of vendors with the outstanding balances should also be generated for year-end. You may be able to claim back the taxes paid on the accounts payable in the fiscal year, depending on your government authority.
Take your 2012 Profit and Loss statement and enter this information into your 2013 budget. Then take a closer look at the sales and expenses for each month and make any changes you see fit, you may also play with the numbers by percentage change (+/-). Plan for major expenses in the upcoming year. Acknowledge the seasonal ups and downs (if applicable), that’s something many entrepreneurs are reluctant to do.
Of course, you could do all the above by hand. You could even do them in Google spreadsheet. But that could get complex in reality. So picking a suitable accounting software is a critical business decision. Avoid accounting applications with too many features, you’ll find yourself overwhelmed. Sometimes, less is more.
The more organized you are, the easier it will be for you and/or accountant. This will save you time and money - more time for holiday shopping, and more gifts under your Christmas tree!
blog comments powered by Disqus
Later on, we’ll conspire
as we dream by the fire,
to face unafraid,
the plans that we’ve made,
Bookkeeping in a winter wonderland!