Many of us celebrate the New Year with resolutions to better ourselves. Here are some resolutions you can adopt to get your business in better shape for the upcoming year.
1. Review your Financial Statements
Reviewing last year’s numbers helps you see your business trends clearly, and gives you the ability to make informed decisions. It is also great for fraud prevention to make sure that money is being spent properly. Take the time to see if the prior year numbers were what you expected, and if there are changes you would like to see in the upcoming year.
2. Collect Outstanding Accounts Receivables
It’s common to forget to collect on your invoices, especially when you have more than just a handful of Customers. Whether you use Quickbooks software, or a simple spreadsheet, set up a system to track sent invoices and received payments.
3. Maintain a Check Register
If you write checks, vendors don’t always cash them right away. Maintain a check register to keep track of all checks written to make sure you’re keeping enough cash in the bank account.
4. Paying Contractors
If you pay a contractor $600 or more in a year, a 1099 tax form needs to be filed to report their earnings.
The W-9 tax form is filled out by the contractor, and it is the Employer’s responsibility to send the 1099 to the IRS and the contractor. Remember to get the W-9 signed before sending any payments.
DEADLINES: The 1099 must be sent to the contractor by January 31 and sent to the IRS by February 28 (or March 31 if you file electronically).
5. Organize your Receipts
It’s important to keep a separate bank account and credit card account for your business. But in the event of an audit, bank statements are not enough! Physical receipts may be requested, so it’s important to keep all of them.
As always, contact your tax preparer for counsel.
If you would like to know more about our bookkeeping services, please visit our website or contact Jeff for a free 20 minute consultation.
Jeff Kohn, CPA