It’s the end of the year. How did that happen so fast?
You may be shocked it’s December or that holiday decorations are up again. However, there isn’t too much time to stand there. There are many things to be done now that it’s the end of another year.
Whether it’s your first or 50th year in business, your year-end checklist is as important as anything else you do throughout the year. However, here are five of the most important items to add to your list if they aren’t there.
Review your Finances:
Once that calendar page turns to January 1, you can conduct a full financial review of your business for the previous year. You may want to run a few reports, such as a profit and loss statement, balance sheet, and cash flow statement. These can be done through the accounting software you use.
While running these reports will help with tax planning, they can also help you to plan for the next year. If your profits are higher than expected, it might be a good time to make some larger business purchases. If profits are lower than expected, it may be a good time to make changes for the next year.
Review Legal Compliances:
Ensure you have your business licenses and permits up to date to operate your business. Check the renewal dates for your permits or licenses and mark them on the calendar when you need to have those items renewed in 2025. It’s also a good time to review any vendor contracts or supplier contracts.
Starting January 1, 2024, a new regulation requires business owners of corporations and limited liability companies (LLCs) to submit a Beneficial Ownership Information Report.
If your business was formed in 2024, you have 90 days from your registration date with the Secretary of State to file the BOIR. Businesses formed before January 2024 must file a BOIR by Jan. 1, 2025.
Review Business and Goals:
Reviewing your business goals for the next year is an important part of being a business owner. This is a good time to take stock of your past year and your future goals and to adjust as needed.
It might also be time to review your business plan. Are you on track? Did you deviate and need to update your business plan? Are you behind on your goals?
These are all good questions to ask yourself about your business and map the year ahead. If you changed anything from your original business plan, you should rewrite your plan accordingly.
Manage Inventory:
If your business has any physical inventory, it’s good practice to maintain accurate records of the items. Conduct an inventory count of all items you can reconcile with your records. You can consult a tax professional for any equipment or inventory write-offs.
Prepare for Tax Season:
While no one likes doing their taxes, now is the time you can start gathering all the information you’ll need to take to your accountant to ensure your taxes are completed on time in 2025 (personal tax returns should be filed by Tuesday, April 15).
You can also meet with your accountant to review any items to decrease your taxable income, such as depreciation, tax deductions, tax credits, or eligible expenses. It’s also best to ensure you have made all your estimated tax payments to the state and IRS, as well as statements you’ll need to issue, such as W2s for employees and 1099s for independent contractors (which are due by Jan. 31).
The end of the year is a great time for reflection and with a little planning, you can set yourself up for a great year ahead.
