Year-end business planning

6 Year-End Planning Strategies For Your Business

What's Your Playbook?

Now that we are in the fourth quarter, it’s time to acknowledge that your business needs your attention.

Most businesses are calendar-year filers which follow the same start date and end dates of a regular calendar, from January 1st through December 31st.  As such, books and records are closed at December 31st for the preparation of the New Year, as well as, the filing of taxes.

In order to ensure a successful year-end, there are several tasks that should be part of your fourth quarter playbook.

Year-End Tasks:

Update your books and records

Be sure to keep your books up to date, recording disbursements and receipts; then reconciling bank, credit card and loan accounts. Having knowledge of where your business stands is key.  Be sure to in account for receivables and payables, as well.

Compliance Checks

Do you use vendors and service providers that your business must issue 1099’s? If so, be sure that you have current W-9’s on file. If not, refresh your records prior to year-end.

Do you need to report any employee fringe benefits for payroll reporting purposes by December 31st? If so, check with your payroll provider for specific due dates and be sure to report in the current year.

Determine Who Owes You Money

Review accounts receivable to determine the status of aging.  That is, you determine when the invoice is due in accordance to the terms established with your customer.  Likewise, review accounts that are delinquent and determine the likelihood of collection and perhaps, write-offs.  This is important because the taxability of uncollected accounts is determined on whether your business files on the cash or accrual basis.

Determine What Money You Owe 
Review accounts payable to determine the status of aging and due dates.  Determine if the business has the cash flow to pay by year-end or defer to new year.  This is important because the deductibility of unpaid expenses is determined on whether your business files on the cash or accrual basis.

Determine the Profitability of Your Business

Once you have updated the books and records of your business, it is time to review its financials.  A well-organized profit and loss statement will provide the information necessary to determine the income that your business has generated for the year.  Be sure to review the profit and loss report on a monthly basis to help identify trends in your business, which will be useful in year-end planning.

Determine the Tax Liability of Your Business

Hopefully, you have engaged in tax planning through-out the year and already have a good idea of the projected tax liability of your business.

Once the above has been completed, consider scheduling a meeting with your accountant for a year-end review and tax diagnostic. If properly orchestrated (and it’s not at the last minute), year-end planning is the crown jewel where tax savings and strategic planning come together to ensure the best outcome for both the business and business owner.

Not currently working with a proactive CPA/Advisor? Our office demystifies year-end reviews and tax diagnostic planning sessions for our clients by utilizing a comprehensive, well defined process.

We believe that year-end reviews and planning is a team sport – Are you In?

Warmly,

Cherie D. Putman, CPA, CFP ®

Putman Financial Group
3528 Torrance Blvd, Suite 219, Torrance, Ca.  90503
Phone: (310) 792-9999

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