It’s a fact that December is a busy time of year for every company. It’s the season where budgets are finalised, expenses are paid, and profits are counted.
The question is – do you have your financial house in order before the end of the year?
Here are 5 things you can do to keep your financial affairs in good shape and protect your business:
1. Generate and analyse all standard financial reports
You need more than simply a gut feeling to have a comprehensive view of how well your company is doing financially.
Make sure you run all the standard financial reports – profit and loss, balance sheet, cash flow statement, etc. – so that you have a clear understanding of your current situation.
This will help you to get a clear picture of your company’s financial health and spot any potential problems.
You can use the findings from these reports to help you make some year-end decisions. For instance, if you’ve not reached your profit goals, it may be time to make the necessary changes for next year; if your earnings are greater than anticipated, you might consider planning how to reinvest into the business next year.
2. Reconcile your accounts receivable and payable
If you’re like most businesses, your accounts receivable and payable are two of your biggest liabilities.
This is why it’s important to make sure these accounts are reconciled and up to date.
You don’t want any outstanding invoices or bills going into the new year, as this can impact your cash flow and cause problems down the line.
So ensure that all invoices have been paid and that all bills have been received and recorded before the end of the year.
3. Prepare your tax documents
As far as the government is concerned, the year-end is December 31. This means you need to be ready for tax day, which falls on April 15 in most countries.
It’s also worth noting that some companies may have more than one tax return to file – your country’s rules are your responsibility to obey.
Make sure you have your accounts and financial reports ready so you can file your return.
4. Check your inventory and fixed assets for accuracy
If you keep physical assets such as equipment and machinery, it’s important to make sure they’re correctly accounted for.
This means doing an annual inventory or fixed asset audit to ensure that what you have matches up with your records.
Any discrepancies need to be addressed and fixed before the end of the year.
5. Backup your data
All critical documentation, consumer data, emails, creative briefs, and so on should be backed up and kept safe.
Even if you use a cloud-based financial management solution, it’s still important to create a backup, whether offline or online, in case anything happens to the original.
Sometimes the best way to protect your data is to have an off-site backup.
These are just five of the many things you should do to protect your finances before the end of the year.
By taking care of these tasks, you’ll give yourself a head start on making a successful start to the new year.