There are several important year-end accounting, bookkeeping and administrative chores owners of small and midsize businesses must take care of before popping the champagne cork to ring in 2010.
Many tasks should be handled as close as possible to the calendar rollover. Don’t procrastinate. Schedule the tasks and make it a priority to get them done.
Several reports must be run at the end of every financial year. These reports summarize your entire business year. You’ll need a complete set of these basic financial documents:
• Profit and loss statement
• Balance sheet at year-end
• Income tax summary
• All transaction details by account for the year
• Payroll tax and employee earnings summary
|The payroll tax and employee earnings summary will come in handy if an employee or former employee ever questions your withholdings.
Business owners must complete and submit all required tax forms. If you have employees or hire independent contractors, there are three essential forms to prepare before Jan. 31:
• Form W-2 – Employers must file Form W-2 for wages paid to each employee. Anyone required to file Form W-2 must also file Form W-3 to transmit Copy A of the W-2 forms.
• Form 940 – This form is used to report your annual Federal Unemployment Tax Act tax.
• Form 1099-MISC – This form must be completed for each independent contractor you paid $600 or more to. Form 1096 must also be completed to transmit Copy A of Form 1099.
Make backups of all these important documents. There are a number of good, cheap and free online storage and backup services available.
In addition, print out all critical documents on paper, label them clearly and store them as part of your company’s permanent records.
Having hard copies of all your important financial records protects you in the event of software system obsolescence, data loss or other technological failure. It is wise to make several backup copies of these reports and store them separately off-site.
Another important year-end chore is a physical inventory. An annual inventory count can reveal shrinkage, losses, discrepancies or other problems that might not have shown up previously.
It will also signal when it’s time to clear out, dispose of or write off obsolete or spoiled stock.
If you need to meet with your accountant, attorney or any other professional to complete some or all of these annual tasks, schedule that meeting now and gather up necessary data and documents so that you’ll be prepared.
With these tasks completed and the knowledge that you have taken steps to set your business up for the year ahead, you’re all set.
You can go ahead and pop the cork on that champagne bottle and celebrate.