The last few weeks of every year fly by really fast, but before you get swept away by the hustle of planning for 2018, set aside time to bring the current year to a close and be prepared for the year-end review of your financial records to have your company ready for the tax preparation and tax filing.
These six key points can be used by construction companies to have their financial records ready for the tax preparation.
Finally, no matter how well or poorly your business did in 2017, the coming new year presents an opportunity to do things better.
1. Collect all business receipts
Make sure you have all receipts supporting your business expenses piled in an organized manner. This will also help you cross-reference the receipts against all the expenses that are recorded in your financial records. If you find business receipts that are unrecorded, make sure you record these on your books to maximize your business deductible expense.
Another cost-saving opportunity is that the more organized you can be, the less time it will take your tax preparer to prepare your income tax return, which translates into lower fees for his/her service.
2. Review aging of receivables
Run a report or request your bookkeeper to provide you an aging of receivable to identify past-due invoices. Review these invoices and determine the reasons why these remained uncollectible. Make sure you send statement of account to remind customers of their outstanding invoices and work closely with them to provide the paperwork needed to facilitate the processing of payment (e.g. purchase order, work order, change order, invoices, etc.).
3. Establish a good relationship with a banker that cater to small business
Establishing a good relationship with your banker early on is a good business practice. Like your lawyer or accountant, use your banker as a true consultant.
4. Bonding Planning
Proper planning is critical. As the end of the year nears, we recommend planning in advance with your business advisor or bookkeeper to be sure that the numbers and ratios are strong enough to support the credit that you need.
5. Close your Company’s Books
Depending on your company, it involves looking through the year’s transactions, making sure they are all properly categorized, adjusting entries for any company activities that didn’t make it on your books, and then reviewing to make sure everything balances and ties out such as recurring journal entries, review bad debt allowance, accrue expenses and take a hard look at jobs to get a handle on change orders and estimated cost to complete.
6. Consult with your Tax Preparer for year-end tax planning
Your construction business is unique and your tax planning strategies depend on your company's goals and financial circumstances. Be sure to consult with your tax preparer for the year-end tax planning.
If you need help with your bookkeeping and tax preparation for your construction company, contact us today at firstname.lastname@example.org 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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