It’s the most wonderful time of the year!
Christmas is just right around the corner, so we start shopping for gifts, planning what to prepare and cook for the family, and probably decorating our houses with ornaments. We’re so caught up in the cheerful and chilly vibe of the season until it suddenly hits us… the dreadful preparation of year-end financial statements for tax preparation and filing.
But, do not fret! We have some tips and reminders on how to get your financials ready. Here’s what you need to do:
Review the balances of all accounts, including respective subsidiary balances
Make sure the balances are what you expect. If not, see what needs to be included or revised.
Ensure that all of your assets and liabilities are accounted for
Gather your receipts or invoices for your purchases like furniture, equipment, and inventory. Make sure that all your loans, notes and other trade payables are recorded and reconciled.
Thoroughly review your business operational efficiencies closely
Look at your cost of goods sold and operating expenses with period analysis (comparing January to November of the current year vs the same period of last year). This will provide you meaningful insights on your business output vis-à-vis your spending. It will allow you to identify where you spend the most as a percentage of your revenue and did you get a good return on your practice's spend. In addition, make sure that these changes fall within reasonable expectations. Note some unusual increase/decrease and find out why such changes occurred.
Reconcile your accounts with the 3rd party statements to ensure accuracy and completeness of your financial records
You would have to compare your account balances to other independent systems and sources of financial data, such as bank statement, credit card statements and loan statements. Also, if discrepancies are identified, you should take proper corrective actions to resolve them. This is to verify that all of your entries are complete and accurate. If you are unsure of how to correct these, consult your bookkeeper or accountant.
Observe emerging business practices and trends. Be on the lookout for the developments in your industry
This will help you run your business more effectively and efficiently in the coming year by identifying your company’s strengths that you can leverage on, your company’s weaknesses that you need to improve, and opportunities and threats in the industry that you must be aware of so you can take appropriate action or plan accordingly instead of being hit blindly. Bookkeeping firm like FAS Bookkeeping and Tax Services provides these insightful reports to their clients.
Self-Employed Health Insurance Deduction
If you are an S-Corporation and you pay for your health insurance premiums, consult with your tax preparer on how this should be correctly reported as a tax deduction.
Personally-paid Business Expenses
You don’t want to miss these deductions, so you will have to put together all your receipts for the year and summarize in a format (e.g. spreadsheet for all these kinds of business expenses) that you can provide to your bookkeeper so they can record this on your business financial records and utilize the business deduction for these expenses.
Examine meals and travel expenses
You should look upon all your transactions posted to meals, as well as your travel expenses. You would want to make sure you eliminate any personal expenses.
Collect W-9 Forms
This is a very helpful thing to do. W-9 gets you the needed information from your vendors and independent contractors that you hire. If you pay them $600 and over during the year, you need to prepare and send a Form 1099 Misc for them. These are due on January 31st. If they operate as an S or C Corporation, then you won’t need to file for them. Also, if you paid through a third-party payment network such as Paypal, you do not have to worry about making one as they file 1099 on your behalf.
Total intensive review of your financials
This is the best time to meet with your bookkeeper and tax preparer to go over your 2017 financial results to get you ready for a stress-free year-end tax preparation and tax filing.
We hope this helps you a lot since this will be easy to remember. You just have to look back and do things in …….
If you need help with your bookkeeping and tax preparation for your medical practice, contact us today at email@example.com or 832-437-0385.
We help you plan, forecast and analyze your financial data
so you can get on top of your finances today to grow your
small business big tomorrow.
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