Here is a list of must-do accounting tasks for all business owners.
- Organize your accounting records
- Review bank reconciliations
- Go over accounts receivable
- Go over your financial documents
- Think About what you can write off
- Ask about additional deductions
- Plan your taxes
- Think about what changed this year
1. Organize Your Accounting Records
Your accountant or bookkeeper will need 3 to 4 weeks to complete your year-end so make sure you provide them with all of your records well before your due date.
This shouldn’t be a problem especially if you’ve updated and organized your records every month. Be sure to provide a backup file of the accounting software you’re using (especially if it isn’t cloud based), any legal invoices paid during the year and year-end credit card and bank statements.
If you have investments, you will need to provide statements, year-end expense/income reports, valuation, portfolio, and any tax slips (which are usually issued in January or February).
2. Review Bank Reconciliations
Review your bank reconciliations and make sure that your books balance according to the bank statements. This should be done for every account the business has. Also make sure that no cheques have been outstanding for more than six (6) months.
3. Go Over Accounts Receivable
Follow up for collection if there are any items in accounts receivable that have been outstanding for more than sixty (60) days. If it isn’t collectible, see if the item can be written off. This will allow you to claim the HST on the invoice and get a deduction on your corporate taxes.
4. Go Over Your Financial Documents
This includes reviewing your balance sheet and income statement. Take a look at the previous years as well. Scrutinize numbers that haven’t changed from last year because there could be an error in how these numbers were posted this year.
5. Think About What You Can Write Off
Does your business have any equipment which isn’t being used? If you do, tell your accountant about it so that they can write it off your books.
6. Ask About Additional Deductions
If you drive and use your personal vehicle for business then you can claim this as a deduction on your corporate taxes. Be sure to keep detailed mileage logs to justify your deduction.
7. Planning Your Taxes
Meet with your accountant to see if you could take any steps which would reflect positively on your tax return. For example, you could get a tax deduction if you purchase equipment for your business now instead of waiting for the new year.
Your accountant can also guide you on restructuring your business so that you can achieve your long-term goals.
Going through this list is a great help to your accountant in the year-end process. Yes, we agree that there are some complexities which need professional financial assistance and this is where we come in.