Year-End Bookkeeping Insights for Businesses

Maximize your business finances before year-end.

As the year winds down, business owners often feel a mix of relief and anxiety. The holiday season is approaching, but so is tax season. This is where a good bookkeeper becomes your secret weapon. At Tallyvine, we understand the year-end crunch and want to help you navigate it smoothly. Here's what you should be discussing with your bookkeeper right now:

Preparing Accurate Financial Statements

Your bookkeeper can compile your financial data into crucial reports like the profit and loss (P&L) statement, balance sheet, and cash flow statement. These aren't just for tax purposes; they provide insights into your business's financial health.

Example: A P&L statement reveals whether your revenue streams are sufficient to cover your expenses. If not, you can strategize with your bookkeeper to identify cost-cutting measures or explore new revenue opportunities for the coming year.

Key Financial Statements:  Profit and Loss (P&L) Balance Sheet Cash Flow Statement

These reports provide a snapshot of your business's financial performance and position. The P&L shows your revenue, expenses, and net income (or loss) over a specific period. The balance sheet shows your assets, liabilities, and equity at a specific point in time. The cash flow statement shows the movement of cash both into and out of your business over a specific period.

Organizing Receipts and Documentation

Don't underestimate the power of organized receipts! Your bookkeeper can help you establish a system (digital or physical) to keep track of all your business expenses. This saves time and reduces stress when it's time to file taxes.

Example: Using cloud-based accounting software like QuickBooks Online, your bookkeeper can help you scan and categorize receipts directly into the system. No more shoeboxes overflowing with paper!

Reviewing and Classifying Expenses

Ensuring expenses are correctly classified is crucial for accurate financial reporting and maximizing tax deductions. A bookkeeper can meticulously review your expenses, identify any discrepancies, and ensure they are categorized appropriately according to IRS guidelines.

Example: Is that lunch a legitimate business expense? Your bookkeeper can help you determine if it meets the criteria for a deductible meal, considering factors like who attended and the purpose of the meeting.

Tax Planning and Preparation

Proactive tax planning is key to minimizing your tax liability. Your bookkeeper can work with you (and your CPA) to identify potential deductions, credits, and other tax-saving strategies before year-end.

Example: Are you eligible for the Qualified Business Income (QBI) deduction? Your bookkeeper can help you gather the necessary information and calculate your potential deduction. IRS Publication 535 provides further guidance on business expenses.

Remember to consult with a qualified tax professional for personalized tax advice. The information provided here is for general guidance only.

Conclusion: Your Bookkeeper, Your Year-End Ally

Don't face the year-end crunch alone. Your bookkeeper is a valuable resource who can help you streamline your financial processes, prepare for tax season, and make informed decisions for your business's future. Contact Tallyvine today to learn how we can support your business!