Many business owners find themselves juggling multiple tasks at the end of the year as they try to close out their financials. Asking the right end-of-year (EOY) questions can reduce stress, help clean up their books, and even uncover tax savings.
Here are ten questions to help business owners finish out the year strong:
1. Have I Recorded All Credit Card Purchases?
Explain the importance of capturing all credit card transactions to ensure all expenses are accounted for, avoiding missed deductions.
2. Am I Missing Any Debt?
Prompt business owners to verify any debt or financed purchases are properly recorded, including deductible interest payments.
3. Do I Have Any Errors in My General Ledger (GL) Accounts?
Discuss the importance of reviewing the general ledger to spot errors that could lead to missed deductions or unrecorded transactions.
4. Should I Make Any Year-End Purchases?
Recommend making strategic year-end purchases to reduce taxable income, especially for businesses expecting a profitable year.
5. Have I Included All Payroll Benefits for the Year?
Advise on reviewing payroll benefits like bonuses and retirement contributions to avoid later complications with tax filings.
6. Have I Included All Unpaid Bills?
Mention the potential for missed deductions if unpaid bills are not properly recorded in accounts payable before year-end.
7. Did I Dispose of Any Assets?
Encourage readers to review asset disposals or sales and consider the tax implications, including write-offs or income from sales.
8. Can I Collect My Open Receivables?
Describe how uncollectible receivables can be written off, helping to clean up the books and avoid paying taxes on revenue you won’t receive.
9. Do I Have Any Old or Obsolete Inventory?
Suggest writing off old or obsolete inventory to free up storage space and eliminate unnecessary insurance costs.
10. Are My Bank Accounts Current?
Explain the importance of reconciling bank accounts to avoid missing deductions and ensure accurate financial records.
By taking the time to ask these questions and act on the answers, business owners can significantly streamline their financial processes, reduce the risk of missing out on valuable deductions, and prepare for the tax season with confidence. For personalized guidance and to ensure no crucial details are overlooked, consider reaching out to our professional accounting firm.
This content is developed from sources believed to be providing accurate information, and provided by Levitate. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.