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Guide to Fiscal Year-End Checklist For Small Business Owners

By December 12, 2019November 23rd, 2023No Comments

Pumpkin spice lattes turn into eggnog lattes while colorful leaves fall to the ground… yep, it’s definitely year-end. Which calls for a much-needed fiscal year-end checklist. For many business owners, the end of 2019 brings the dreaded time of dealing with year-end finances—because let’s face it. Wouldn’t we rather be attending holiday parties? 

Unfortunately, now that it’s December, it’s something that we can no longer sweep under the rug. Struggling with what to do as year-end approaches? 

Read on to unravel Kashoo’s full 2019 fiscal year-end checklist for small business owners. In this year’s guide, we will run down the following topics, all of which are crucial steps to take during this time of the year. 

  1. Why Year-End Is Important
  2. A Fiscal Year-End Checklist
  3. Questions to Ask
  4. After Year-End (What’s Next)
Guide to Fiscal Year-End Checklist For Small Business Owners

1. Why The Year-End Wrap-Up is Important 

Keeping your financial records organized all year round is a huge component of a successful business. 

But so is the year-end wrap-up. 

Conducting a proper year-end analysis and wrap-up not only helps keep you in the loop about your profits and losses (P&Ls), but legally speaking, it’s a must to keep your records straight (and ready for tax time!)

As tax season approaches in the new year, organized records help make the close of your fiscal year easy to execute. That’s because all your financial statements are exactly where you intended—with numbers fact-checked and accurate. 

2. Checklist: Steps to Take Before the End of the Fiscal Year

This goes without saying, but accounting shouldn’t be something that’s only done at year-end. Successful business owners are smart enough to make time for accounting throughout the year. They use accounting and bookkeeping software, like Kashoo, to store digital receipts, invoices, and keep track of all their transactions. They create good habits for bookkeeping, and they even schedule reminders and dedicate time slots in their busy lives to keep their books on track.

And so can you! 

We’ve summed up a list of to-dos for you before the year-ends. Ideally, these are tasks that you’ve already done or should do throughout the year. The list includes:

Separating Your Business and Personal Finances

We say this every year but it’s an important one. Many business owners don’t treat their work as a business. However, anyone working for themselves is in business for themselves (at least in the eyes of the law!). 

Separating business and personal finances help to paint a clearer picture of your business’ cash flow and can help you save money. 

As fiscal year-end approaches, so does tax season. Keeping these two types of finances apart will help you single out expenses that are often tax-deductible—such as cell phone bills, meals and entertainment, transportation-related expenses (gas, mileage, public transportation), electricity, water, and even mortgage or rent. Not tracking these expenses throughout the year and especially at year-end will increase the chances of missing a big opportunity to pay less tax!

Related: Track Your Small Business Expenses Daily (and how to’s!)

Do a Profit & Loss Review

Your company’s P&L statement will help you gain a snapshot of its overall performance. What does your revenue look like now that the year is almost through? Are there any large expenses that you foresee will hit your books? 

Fortunately, Kashoo generates these reports for you. You can also grant access to other users—such as your accountant—to Kashoo during fiscal year-end, including logging in and exporting any reports or data they need for verification purposes. 

If you have already been meticulously tracking your financial records all year round, then give yourself a pat on your back. You have already completed half the battle and made the latter half easier for you (and your accountant).

Get Those Records Out

Getting your records sorted for your accountant is a must during your year-end checklist. These do, however, differ depending on the type of company you operate. 

If you are an incorporated company: you will need to file a T2 Return (Corporate). Other records to pull out include, but are not limited to: 

  • An electronic copy of your bookkeeping records for the year (and any passwords required to access the information)
  • Financial Statements for the year (Balance Sheet, Income Statement, Cash Flow Statement)
  • Payroll Records (if you have employees)
  • Asset additions or disposals during the year (land, equipment, vehicles, etc.)
  • Business Use-of-Home Details (If running a home-based business);
  • Motor Vehicle Expense Information (Percentage use for business, mileage log, etc.)
  • Income Tax Instalment Assessments and Notices of Assessments

The great thing about this is that you can easily access these reports on Kashoo! All it takes is a couple of seconds to export the reports. Your accountant will receive them in no time—knowing that software eliminates error and re-work.

If you are a sole proprietorship or a partnership, you will need to file a T1 Return (Personal). Instead of the above documents, your account will require personal information slips and those relating to your business. Some common ones include: 

  • T4 Slips (if you have employment income other than your business income)
  • T4A Commission Slips
  • T3 Slips (Income from Trusts)
  • T5 Slips (Investment Income)
  • RRSP Contribution Slips
  • Donation Slips
  • Medical and Dental Receipts
  • Child Care Expenses

You will also need to consolidate all your receipts, invoices, and bank statements for the year if your accountant does your bookkeeping.

Complete a Reconciliation 

Yes, reconciliation is a big word. But it’s a must on our year-end checklist. Reconciliation is important because you must ensure how much you spent in the real world actually matches up to what you’ve inputted into Kashoo

Go through your credit and bank accounts for your business, reconcile all charges and payments, and double-check to make sure the statements from Kashoo match with your records. You should also investigate any unexplained discrepancies right away. The good thing about starting year-end early is to provide sufficient time to catch these potential errors.

Pay Attention to Your Accounts Receivable & Accounts Payable

The next step of the year-end checklist is to check on your outstanding balances. Review Kashoo to see what clients still owe and send statements to get as many bills paid as possible before the end of the year. You’ll also want to extend the courtesy to businesses you owe money to. If your cash flow allows, pay off as many expenses as you can before the last day of the year.  It’s always a good idea to start with clean books for the new year.

3. Questions to Ask 

Reflection is a hugely important tool to raise awareness—especially when it comes to your business finances. Small business owners get far too easily wrapped up in the day-to-day operations of their businesses. From meeting clients, checking emails to negotiating deals, there’s no doubt that leaves little breathing room for reflection. 

Year-end is an ideal time to reflect. Ask yourself questions like:

  • Which areas did I excel in this year?
  • Which areas did I not do so well in, and how can I improve? 
  • What are my lessons learned this year? (jot these down somewhere to find later) 

You should also look into the goals you created last year and identify whether or not you achieved them. It’s a waste of your SMART goals were created, but you’re not comparing your actual performance to these goals.

4. After Year-End (What’s Next)

So the last day of the year has come and gone. Now what? 

At Kashoo, we encourage small business owners to make time for accounting—even throughout the year. Here are some actions to take post-year-end: 

Kickstart Your Next Year’s Budget 

It’s never too early to plan. Analyzing your current year’s statements helps you see any trends in your budget. For example, are you noticing that you missed certain tax deductions in the travel category? Or maybe you had some not-so-good habits with leaving outstanding invoices behind? Whatever it is, planning early equips you with the knowledge and tools to tackle your finances differently (and more efficiently) next year.

Consider Switching to the Cloud (If You’re Not on it Already)

Guilty for storing hardcopy receipts away in your wallet or drawers, then forgetting about them? 

We’ve been there. 

Make 2020 the year to adopt cloud accounting if you haven’t already. Kashoo provides single online storage for all your company’s business finances. Think of it as a smarter, simpler, more automated version of Microsoft Excel—with all the benefits like analyzing data and producing reports!

Stay on top of your bookkeeping with Kashoo
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