By Brian Ravencraft
The end of 2022 is upon us. In fact, it's almost here. What end-of-year planning and clean-up should business owners and farmers do before the end of the year? I asked some of my colleagues at Holbrook & Manter to comment. See her tips below.
The end of the year can be a busy time for small business owners with vacations and projects to wrap up before the new year, but now is not the time to forget about financial planning and taxes. Small business owners need to ensure their books are current and accurate. This can help determine where to expect revenue for the year. Once this information is gathered, they should work closely with their tax advisor to ensure they are prepared for any taxes they may owe and take advantage of any tax savings. - Natalie Bruns
Now is the time to make sure your ledgers are organized and up to date to get an accurate view of the year and start planning for the next year. Business owners should review the company's financial statements to ensure that the accounts and balances are accurate. Do the account balances make sense? Has a write-off been made? Are there unusual expenses? Has there been a material increase or decrease in assets or liabilities from the previous year and why? Are income and expenses close to projections for the year? These are just some of the questions entrepreneurs should ask themselves when reviewing financial statements in order to understand the company's current financial position and begin planning for the future. Business owners can benefit from scheduling a meeting with their CPA before the end of the year to end the year strong and start the year on the right track. –Shirley Boatright
It's always a good idea to make sure your financial records are up to date throughout the year; but it is especially important before the end of the year. This allows you to correct transactions that may have been incorrectly recorded during the year. One step would be to review all accounts on your balance sheet and ensure they are correct: cash accounts need to be reconciled with bank statements; Are there customer accounts in the RA that need to be edited? Similarly, are there any provider accounts on the AP that need to be supported? Are loan balances correct? Are there fixed assets that need to be sold? This type of pre-year-end review greatly simplifies the process of planning and filing year-end tax returns. Many of our clients ask us to review their financial statements before the end of the year to help them resolve any issues they may have. – Linda Lehman
It can be helpful to review your 2021 year-end to make sure you're dealing with or considering the same things as last year, or new points that have come up in 2022. Reviewing your support from the end of last year might reveal some loss in how you handled year-end taxes, payroll taxes, or benefits. You may also find that you need to code things into a different account or move transactions to a more appropriate account. This is also the best time to make sure your support matches what you present in your accounting system! Here are some examples: Do you have your support for PPP loan forgiveness? Does your cash balance match your bank statements? Do your loan balances match your loan documents? - Julie Roe
Taking the time to clean up your Quickbooks will last well before the end of the year. You can ensure that cash accounts are reconciled and bank statements are reconciled. Code and reconcile credit card accounts. Check your profit and loss report to ensure items have been coded correctly to avoid additional questions from your accountant. Review coded fixed asset items and reserve documents to give to your accountant. Will you spend 1099? This is also a good time to review these expenses and prepare your accountant to report them to you. -Emily Zuver
Business owners need to start organizing and preparing their financial documents. This includes tasks such as verifying that you have W-9 documents to issue 1099 documents at the end of the year, calculating taxable benefits to add to employees' W-2 documents, and reviewing internal financial reports such as Balance sheet and income statement. Now is also a good time to start thinking about 2022 to prepare business goals and actions for 2023. This could include creating a budget or identifying Key Performance Indicators (KPIs) to start tracking. These exercises will help you prepare for year-end fulfillment and reassess and realign your goals to start 2023 on the right foot! - Daniel Cottle
Brian E. Ravencraft, CPA, CGMA is a director at Holbrook & Manter, CPA. Brian has been with Holbrook & Manter since 1995 and focuses primarily on providing tax advice and business advice across various areas of business services, with an emphasis on agribusiness and owner-managed businesses and their owners. Holbrook & Manter is a professional services firm founded in 1919 and we are unique in offering the resources of a great company without compromising the focused and responsive personal attention every client deserves. Brian can be reached at www.agribusinessaccounting.com or www.HolbrookManter.com .
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