Fall Financial Checkup: 7 Things Rapid City Small Businesses Should Review Before Year-End
As the seasons change in Rapid City and the year begins to wind down, fall is a great time for small business owners to take a closer look at their finances. Before the holiday season gets busy and year-end deadlines start approaching, a financial checkup can help you identify problems, prepare for upcoming expenses, and head into the new year with a clearer picture of your business.
You don’t have to wait until tax season to start thinking about your books. Taking a little time now to review your finances can make the months ahead much easier.
Here are seven areas every small business owner should consider reviewing this fall.
1. Review Your Books
Start with the basics: Are your books up to date?
Take a look at your income and expenses, bank reconciliations, accounts payable, and accounts receivable. If transactions are missing or records haven’t been reconciled recently, now is a good time to get everything caught up.
Accurate bookkeeping gives you a better understanding of how your business is actually performing and provides the information you need to make informed financial decisions.
If your books have fallen behind, getting them organized before the end of the year can also make tax preparation much smoother.
2. Take a Look at Your Financial Reporting
Your financial reports can tell you much more than whether your business has money in the bank.
Reviewing your profit and loss report and other financial reports can help you identify changes in revenue, expenses, cash flow, and overall business performance.
Ask yourself:
- Has revenue increased or decreased compared with earlier in the year?
- Have any expenses grown unexpectedly?
- Are there areas where you may be spending more than necessary?
- Are there outstanding invoices that need attention?
- Is your business on track to meet its financial goals?
Understanding these numbers can help you make better decisions before the year comes to a close.
3. Start Planning for Tax Season
Tax season may still be months away, but waiting until January to think about taxes can make the process much more stressful.
Use the fall to make sure your financial records are organized and identify any documentation you may need for your tax return. If you own a small business, this is also a good opportunity to discuss your financial position and potential year-end considerations with your bookkeeping and tax professional.
The more organized your records are throughout the year, the easier it can be to prepare an accurate tax return when tax season arrives.
4. Revisit Your Business Budget
Fall is also a good time to compare your actual spending with the budget you created at the beginning of the year.
Maybe some expenses were higher than expected. Maybe your revenue changed. Or perhaps your business has grown and your original budget no longer reflects where your business is today.
Look at where your money has gone so far this year and consider what you expect to spend during the final months of the year.
This can help you prepare for upcoming expenses instead of being surprised by them.
5. Check Your Payroll and Employee-Related Records
If you have employees, make sure your payroll records are organized and up to date before the end of the year.
Fall is a good time to review payroll information, employee records, and year-to-date figures so you aren’t trying to sort through everything at the last minute.
Keeping accurate payroll records throughout the year can help make year-end reporting and tax preparation more efficient.
6. Review Your Sales and Excise Tax Records
For South Dakota businesses that collect applicable sales or excise taxes, fall is another opportunity to make sure records are accurate and filings are being handled properly.
Review your records and make sure your bookkeeping reflects the transactions that have taken place throughout the year.
If you’re unsure whether your business is handling sales or excise tax correctly, consider getting professional guidance before the end of the year rather than waiting until a problem arises.
7. Start Thinking About Next Year
Once you’ve reviewed your current financial picture, look ahead.
What do you want your business to accomplish next year?
Maybe you’re considering hiring another employee, purchasing equipment, expanding your services, opening another location, or simply improving profitability. Whatever your goals may be, your financial records can help you determine what is realistic and what steps you may need to take to get there.
Good business planning starts with good financial information.
Don't Wait Until Tax Season to Get Your Books in Order
Your bookkeeping shouldn’t only matter when tax season arrives. Accurate, up-to-date financial records can give you a clearer picture of your business throughout the entire year.
At Jennifer Young’s Bookkeeping Services, we help Rapid City businesses with bookkeeping, financial reports, payroll, budgeting, tax preparation, business planning, and other financial services. Our goal is to keep your finances organized, your books accurate, and your business moving forward.
If your books need some attention before the end of the year, fall is a great time to get started.