Preparing your Small Business for End of Year PART II - Financials
Last week, I made the case for not waiting for the end of the year to roll around to start thinking about annual planning, gifting, and celebrating with your team. I touched a bit on the financial side of things but decided to reach out to my bookkeeper to ask her what SPECIFIC things we need to be prepared for so we aren’t scrambling while trying to deck the halls. She did not disappoint. Here are her top tips for preparing (your books) for the end of the year.
COLLECT W9S FOR ALL OF YOUR SUBCONTRACTORS.
IRS 1099s must be processed by the end of January. 1099 is used to report non-employee compensation. To process them correctly, a completed and up-to-date W-9 is needed for anyone who provided services to your company that you paid over $600 during the year. If you do not pay employment taxes on this person, they must get 1099.
Subcontractors include, but are not limited to your:
Attorney
Cleaning Service
Graphic Designer
IT Professional
Photographer
Virtual Assistant
Bookkeeper
Accountant/CPA
Business Coach
Consultants
Landlord
Installers (Tile, Carpet, Appliances, Wallpaper, etc.).
Pro Tip: is recommended that you always request a completed W-9 form from any business or individual before you remit payment on their bill.
REVIEW YOUR OPEN INVOICES AND UNPAID BILLS
It is recommended that you start to review your Open Invoices and Unpaid Bills reports and address any discrepancies now.
Follow up on unpaid invoices to your clients to close out completed projects. It is also advantageous from a tax perspective to pay as many vendor bills as possible before the end of the year.
Read last week’s post where I share a cautionary tale about making sure you are accounting for things accurately in your business so you aren’t paying taxes on the money you shouldn’t.
Preparing your Small Business for End of Year - Part I
Need a great bookkeeper?
Contact Business by the Book - Professional bookkeeping and accounting support for interior designers. Submit a contact form and they will reach out to schedule a complimentary business evaluation to get started.
Tell them Kate sent you! ;)
