5 Steps To Clean Up The Books Before Starting A New Year
Starting 2020 and getting ready to file taxes in April can be a daunting task when your books are messy.We suggest getting on top of your books now as 2019 comes to a close. However, we understand it will not be an easy thing to do and bookkeeping can be a more complex task than you think. That is exactly why we have pulled together five of our best tips for conducting effective year end bookkeeping. You can take a look at these tips and implement them accordingly. Then you can overcome stress and frustration at the end of the financial year.
1. Bring The Books Up To Date
The most obvious task is to always maintain your books. We know that it's easier said than done. But other business matters definitely get in the way at times so we have helped formulate a strategy to ensure you stay on top of the books. The added bonus of this is that you will be able to reduce the amount of work that you have to do at the end of the financial year. We'll start by conducting an audit of your books to find areas for immediate gains and focus on long term success by maintaining the books. This might look like a list of to-dos. They say that Rome was not built in one day.This also applies to your books. Habit might sound tedious but it is what drive the finish line.
Understanding your business through the books allows you to make appropriate changes to the business before it's late. You can also use this to keep the records in shape. When you have to face a CRA audit, you don't need to worry about anything because you are ready to present all the documents tied up in a neat bow.
Automation can help you speed up manual methods.Today's software have a lot of automation built-in. We would encourage you to explore the app ecosystem each software package has available.
2. Methodically Review Every Financial Statements
Once you are confident that your books are up to date, you can go ahead and review the financial statements. This is where you a professional like Forte Innovations can also assist in understanding what it means to have cashflows projections and cashflow management. We can help you to get expert insights from an accounting expert.
3. Close The Books
Before closing the books, review the chart of accounts to ensure that all balance sheet balances are in good standing. Once books close, no changes can be made. This ensures reliability and consistency of the financial statements over days, months and year-to-year comparisons. It also is an opportunity to remove any clutter or likes that are no longer used, or do not add value such as old bank accounts.
4. Prepare for the new year
When everything is caught up and up-to-date, it is time to prepare for the new year.The books are clean and you have the right information to make strategic plans for the new year.Forte Innovations CFO services can help in this regard, too. Start with a strong financial plan for the new year thanks to the financial statements, the analytics and the insights provided by Forte and the cleaned up books.
A budget will help you focus on areas of growth and opportunity, while defocusing on those that will not drive growth based on your 1, 2, 3 and 5 year strategic plan that you have worked so hard on.With a budget, you can also plan ahead for your tax payments if you have any taxable income.With all these and other pieces, you can estimate the income for each month of the year and figure out the expenditures. Along with that, you know what kind of issues may arise in the next financial year. This provides you with enough time to plan and overcome those issues.
5. Review the entire accounting process
At the end and start of a new year, it is the best time and opportunity to evaluate what has worked and what has not in terms of accounting and business processes.You can have a sit down or an online meeting with a Forte expert.For example, if you would like to reduce the amount of manual work by exploring customized or looking at any off-the-shelf add-ons to your ERP and/or accounting package.
Now that you have everything in a row, you can start the new year with a clean slate. You know that you have the right partners who will be happy seeing you succeed. If you want to review if the processes now being followed are effective or has room for improvement.
Go ahead and start working on these. Then you will be able to take your business to the next level in 2020, while overcoming the hassle linked with bookkeeping.