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December 31 is More Than New Year’s Eve: 5 Financial Chores That Must be Done by Then

By MarksNelson on November 28, 2017 in Articles, Entrepreneurial Services, Jennifer Katrulya
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How are you doing on your end-of-year accounting checklist? By now you should have tried to collect on all payments due from customers and paid up your December bills. If you haven’t, try to make those top priority right now. The last week of December may be too late.

There are other tasks you’ll need to take on before the clock strikes midnight on the 31st. Some can wait until that slow last week of the month, but others need to be at least started before then.

Complete everything that should have a date no later than December 31, 2017, on it.

Here are some of the most common ones:

  • Contributions to retirement accounts
  • Charitable donations
  • Bonuses (unless you’ve decided to delay these until early 2018)
  • Payroll taxes (depending on your filing schedule)

Reconcile all accounts with year-end statements.

If you’ve made this a monthly habit, you’re ahead of the game. If not, you don’t want to go into the New Year without knowing that your account balances in your own records and those of your financial institutions agree.

Reconciling accounts manually is frustrating, and can be error-prone. It can still be challenging if you’re using an accounting application, but it’s exponentially easier and more likely to be accurate. Talk to us if you want to explore this solution in 2018.

Be sure you’ll be ready to send out employee/contractor tax forms in January.

You don’t have to prepare W-2s and 1099s until January, but you’ll want to know that you’ve done all the groundwork necessary. If you have employees, you obviously had them fill out W-4 forms when they first started working for you.

But go through all of your contractor payments. Did you pay anyone more than $600 during 2017? They’ll need to complete a W-9 form so you can send them a 1099.

Tally your taxable sales and make sure you’ve paid all required sales tax.

Whether you submit sales taxes on a monthly or quarterly basis, it’s always important to pay these on time. Failure to do so can result in penalties and interest. It’s one of those things that might fall through the cracks during this busy month.

If you’ve recently started selling products (or plan to soon) and you don’t know what the rules in your state are, you can find out here.

Create a year-end Profit & Loss Report.

There are a number of accounting reports you should run in December, but this is a critical one. Also called an Income Statement, it’s a standard financial report that summarizes your company’s revenues, expenses, and costs during a given period.

If you’re doing your accounting manually, it’s difficult-to-impossible to create the end-of-year reports you need. Accounting applications simply the process, but some of these reports need professional analysis. We generate and analyze these all the time for our clients, and we’d be happy to do the same for you. Contact your MarksNelson professional at 816-743-7700.

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Jennifer Katrulya

Practice Leader