5 End-of-year bookkeeping tips for your small business
As the end of the calendar year approaches, it is a really great time to get your bookkeeping tasks up-to-date and in great shape. End of December may be your accounting year end or it may be a natural break for your business – either way, taking time to ensure that your books are ready for your accountant is time well spent.
Here are 5 bookkeeping tasks that need to be completed each year – and that could be done every month or each quarter for even greater peace of mind. Think of this blog as your great bookkeeping checklist!
- Reconcile your bank statements
Check that any expenditure shown on your bank statement matches your receipts or received bills/invoices and any payments are matched to the related invoice. Ensure that all transactions are posted correctly too, for example, stationery orders are posted under PPS (printing, postage and stationery).
If you use Xero or other accounting software, ensure that your bank statements match the information shown.
- Check your receivables
One of your most essential jobs is credit control. If you do not get paid by a customer on time, it can cause cash flow problems. Check daily, if possible, to support your cash flow as this will make your year end reconciliation a whole lot easier!
- Chase any bad debt
Waiting until the end of the year to chase any customers who have not paid you is often too late. A gentle reminder a week or two after submitting the invoice often generates payment – leaving it until a couple of months – or even an entire year – after payment is due, makes securing the money so much harder. Do not ignore the situation – keep on top of bad debt and consider debt collection letters or even court action when necessary.
- Review your balance sheet
Keeping an eye on your balance sheet will show you how much ‘cash’ you have available for investment and if your cash flow is tight, prompt you to change how you operate. Maybe you need more sales or halt expenditure for a short period to bring things back into balance. This is another task that needs to be completed by the year end, but really should be done weekly or in some cases, on a daily basis.
- Count your stock!
A stocktake should be done regularly anyway but is a requirement at your year-end. You need to ensure that the stock held is equal to the stock shown in your accounts and if there is a difference, make an adjustment within the relevant journal.
Completing these 5 simple tasks will ensure your small business is operating efficiently – and help you to keep on top of your bookkeeping obligations. Of course, Hour Hands are always on hand to help with willing and able bookkeepers just poised to spring into action. Our bookkeepers are always available to complete those tasks that you just don’t have the time or capacity to do yourself. We’re also here for guidance and ensuring that you have lots of information that helps you run a successful business.
To find out more simply visit call us on 01727 818262. We will ask how we can support you and offer a solution either on an hourly rate or package cost. The choice is yours as we’re simply here to help.