Are Your Books Really Ready?
As the fiscal year wraps up, you're probably breathing a sigh of relief thinking your books are all set for the tax accountant. But are they truly ready? Before you send anything over, there are crucial checks you need to perform to ensure your financial statements accurately reflect your business’s financial health. Here’s a checklist to guide you through this critical review.
1. Print Your Financial Statements
Begin with printing your Profit and Loss (P&L) statement along with your balance sheet. Modern accounting software usually offers the convenience of printing comparative statements from the previous year alongside them. This side-by-side comparison is your first step in identifying discrepancies or unusual changes.
What to Look For:
Variances Since Last Year: Examine any accounts with significantly higher or lower figures than the previous year. Anomalies could be a sign of progress or an indication of recording issues.
Uncategorized Transactions: Ensure no uncategorized expenses, income, or assets exist. Each line item should be clear and understandable. For a deeper dive into balance sheet review, click here.
2. Review Fixed Asset Depreciation
Your fixed asset depreciation schedule is a vital part of your tax return. Confirm that:
All assets listed for last year are still in possession or properly accounted for if disposed of.
New purchases or disposals during the year are accurately documented.
3. Update Your Tax Accountant on Business Changes
Any significant change in your business can have tax implications. Make sure to inform your accountant about the following:
Ownership changes
Switches in accounting systems
Loan forgiveness
New health insurance policies or retirement plans for owners
Such updates are crucial for accurate tax preparation and planning.
4. Seek Help if Needed
Discovering issues in your books can be daunting. If you find discrepancies or just need a professional review, don’t hesitate to reach out for help. A clear and correct financial record is not just a compliance requirement; it’s a cornerstone for strategic business decisions.
Preparing your books for the accountant is more than just a year-end task; it's an opportunity to gain insights into your business's financial trajectory. By taking these steps, you ensure that your finances are not just ready but robust enough to stand up to scrutiny and serve as a foundation for the following year’s planning and growth.
Need assistance getting your books in order? Our team at ElitePro Bookkeeping is here to help. Contact us today to ensure your finances are precise, comprehensive, and ready for any tax challenges ahead!
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