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Year-End Bookkeeping and Accounting Checklist for Small Business Owners

The end of the year is a hectic time for small business owners. Between catching their breath after tax season and managing holiday traffic and sales, year-end bookkeeping and accounting tasks understandably fall to the bottom of the to-do list. 

Xendoo is here to help you avoid the year-end scramble. Check out our checklist to organize your finances and successfully wrap up the year! 

Get Your Books Caught Up

The first step toward new year readiness is ensuring that your books are up-to-date, which can be done by:

  • Accounting for all bills and invoices, even if they have yet to be paid. 
  • Reviewing bank and credit card statements to confirm that they match. 
  • Recording any expenses that were paid for using personal funds. 

Accurate records ensure reliable financial statements. If your books are behind a few months, or even years, you are not alone. 25% of business owners are behind on their books. Xendoo is here to help. Our online bookkeepers provide catch up bookkeeping services, so you can focus on the future. 

Collect the Necessary Forms 

Once January arrives, your accountant will request certain forms in order to close your books and file your small business taxes. Be sure to collect them as soon as possible to ensure a smooth start to the new year.

 

Form W-2

Form W-2 is used by business owners to report salary information for their employees, as well as the taxes that are withheld from their paychecks. Employees need this information to file their personal tax returns. 

 

Business owners are responsible for sending this form to the IRS. Employers are required to provide the form to their employees no later than January 31st, so that employees have enough time to file their taxes.

 

Form W-9 

If you worked with an independent contractor or vendor, and paid them $600 or more, you will report those payments to the IRS using Form 1099-MISC. The information needed to complete this form is listed on Form W-9, which can be collected from your contractors.

If any W-9s are missing, be sure to reach out to your independent contractors and have them complete the form before the end of the year.

 

Schedule K-1

CPAs provide the Schedule K-1. It is used by S-Corporation shareholders and partnership members to report their share of the business’s profits and losses, and is included with your personal tax return.

 

Form 1009-K

The 1099-K tracks the payments received through third-party payment networks, like eBay, Stripe, Shopify, PayPal, and others. You will receive one 1099-K from each of the Online Payment Networks you use, and you are required to complete each one. Your gross receipts must be reported to be at least as high as the amount reported on your 1009-K.

The 1099-K shows gross sales, which is the amount before fees are deducted. What appears in your bank account is the Net Amount, the amount after fees are deducted from the Gross Amount. The sales from each vendor must be reported as the Gross Amount, which is what appears on the 1099-K.

Click here to download our Tax Documentation Checklist.

Follow Up on Past-Due Invoices

Review past-due invoices to see what you are owed. If there are any outstanding payments, reach out to your customers before the end of the year to successfully close your books. 

Account for Inventory

If your business stores inventory, perform an end of year inventory count to make sure your totals match your Balance Sheet and your books. This review will provide insight for waste and loss management, as well as reduce inaccuracies in inventory counts and receivings.

Consider utilizing an inventory management software to streamline inventory creation and order fulfillment.   

Review Your Financial Statements

Once your bookkeeping is completed, review your financial statements to confirm your numbers are correct and that you are utilizing accurate data. You can also take that time to review how your business grew over the course of the year. Was there a steady increase in profits? Can you identify connections in your costs and sales? The financial statements provide visibility to confirm that you are on track to meet your goals, make projections, and prepare for the future.

Click here to learn more about the key financial statements. 

Reach Out for Help

Everyone deserves a supportive team of people who care. If the year-end scramble has you feeling overwhelmed, reach out to an online bookkeeping service. It is an excellent resource for accurate financials and time-saving solutions! 

Xendoo’s bookkeeping and accounting team provides consistent monthly bookkeeping and timely, accurate financial reports, delivering financial visibility all throughout the year. This provides the insight needed to make the most informed decisions for your business.

Ring In Success

Now that the year-end bookkeeping and accounting checklist is complete, you are ready to welcome a new year of successful growth! We would love to partner with you as your online bookkeeping, accounting, and tax team! 

Schedule a call with one of our online accountants to get started. 

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