As anyone in business knows, year-end means more than just taking down one calendar and putting up another one. It means it’s time to look at your budget, compile your reports, and make certain all of your accounts are reconciled and paid up. Some people wait until the very end of the year to actually start working on these things. Others like to start early, but then they end up needing to amend all of their reports and such with more information that comes in after they start working on this year-end work. So when is it too early to start thinking about year-end?
Note that “year-end” doesn’t necessarily mean the December 31. The term is used to mean the end of a business’s fiscal year, which does not always coincide with the end of the standard calendar year.
Is Your Busy Season Over?
This is one of the first things to ask before you start working on year-end tasks. If you’re a retailer, for example, and your year-end is the end of December, you may not want to start doing much work prior to the last week or so. That’s because you’ll probably do a lot of business right before the holiday season. You don’t want to do a lot of work on your accounts only to have to redo them.
Are you in your Fourth Quarter?
Businesses generally divide their fiscal year up into four quarters of three months each. For most, it doesn’t make sense to begin doing any year-end work until it’s the fourth quarter. That’s because you still have three full months or more of income, expenses, and other transactions. It doesn’t seem reasonable to start doing year-end work when a lot can occur during the remaining months.
Do You Use an Accountant?
If you have a CPA handle some or all of your year-end reporting, you do need to start thinking about your year-end a month or so in advance. This way, you won’t be rushing around to get everything together and to your accountant in only a few days. You do, however, want to make sure you don’t start sending them information too early. You want to be sure you have everything they need so they don’t have to redo anything to account for new information.
Do you Keep a Running Report?
Some businesses like to use tools like Timberline software to keep a running record of all of their business transactions. This can be a great way to keep track of everything throughout the year so that you don’t have to do a lot at year-end. You can keep all of your receipts organized, keep track of all expenses and income, track taxes paid for employees, and much more. You may even want to do a mini year-end report at the end of each quarter or halfway through the year to see how your business is doing. This may increase the amount of work you do throughout the year a little bit, but it will make your year-end work much less.