![]() ![]() If you find discrepancies between your count and balance sheet, make adjustments.Īccounting for inventory at year-end can also help you know how much you spent on inventory during the year and its value. Match your inventory totals to your balance sheet. If your business has inventory, complete an inventory check before year-end. Otherwise, you could wind up with empty shelves or inventory shrinkage (e.g., expired goods). You must get an accurate count of the materials and supplies you have on hand if your business has inventory. Generally, the collection agency keeps a portion of the total amount due. Collection agencies can help you collect past due invoices for a price. If you really can’t collect the money yourself, consider hiring outside help. Plus, it shows customers that you understand their situation and care about their needs. Negotiating an installment plan can help you get paid faster. The customer might not be able to pay their invoice off all at once. If collecting payments from customers is difficult, consider offering them a payment plan. Be understanding, patient, and positive when you reach out to late-paying customers. When reaching out to customers about past due invoices, be professional. Establish a payment plan with customers.Contact customers with past due invoices.Set up invoice payment terms (e.g., due dates).So, what do you do if a customer won’t pay? You can: Some customers may just need a gentle nudge with a simple invoice reminder. This means putting in a little legwork and trying to collect past due invoices before the new year. If you want to wrap up your books for year-end, try to collect the money that customers owe to your business. If you find a discrepancy, make sure you find the accounting mistake and fix it. Use your balance sheet at year-end to ensure your accounts balance and everything is in order for the new year. Your liabilities and equity should always be the same amount as your assets. Equity: Money left over after you pay expenses.Here’s a snapshot of the different aspects of your balance sheet: Your business balance sheet shows your assets, liabilities, and equity and tracks your company’s financial progress. Tracking your cash flow throughout the year and at year-end can also help you create a cash flow forecast and predict your future cash flow. For example, you can see which months have a higher cash flow and the months where your business’s cash flow is struggling. Your cash flow statement can show you the timing in which money comes in or goes out of your business. Negative cash flow occurs when you spend more money than what you’re bringing in. ![]() Cash flow statements only record the actual cash you have, not credit.Ĭash flow can be positive, meaning that your business has more incoming money than expenses. Your cash flow statement lists your business’s incoming and outgoing cash. Compare this year’s income statement to last year to analyze the differences in revenue and expenses from year to year. You can find your business bottom line by looking at the difference between money gained and lost on your statement. Here are some things you might see on your P&L statement: Your income statement lists all of the money you gained and lost throughout the year. Your income statement, or profit and loss (P&L) statement, summarizes your revenue and expenses. There are a few financial statements that you should have handy, including: Use your accounting records to compile and analyze year-end statements. You can access your financial records in your accounting books. And, statements let you see past and current finances so you can forecast your business’s financial future and plan for the new year.įinancial statements help you understand your business’s financial standing and (hopefully) make tax season less of a burden on your company. They give you a glimpse of where your business stands financially. Your financial statements are a lifeline for your small business. Make sure you check these eight procedures off your year-end accounting closing checklist before the year officially comes to a close.ġ. Your accounting books should be organized, up-to-date, and ready for the transition into a new year. Instead of scrambling (or forgetting) to get your year-end processes complete, use a year-end accounting checklist to organize the way you wrap up the year.īefore the clock strikes midnight on December 31, you need to square away several accounting tasks. If you’re like most business owners, you’re probably juggling end-of-year accounting procedures in addition to heavier traffic and sales and payroll tasks. The end of the year is a busy time for businesses. ![]()
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