It’s Year-End. Time to clean your books!
If you’ve been saying I’ll get to it since February, THIS BLOG IS FOR YOU!
As the end of the calendar year comes to a close. its easy to get distracted by family events and the holiday festivities around the corner. As an entrepreneur I know you have that little voice whispering “don’t forget to reconcile your bookkeeping, tax season is around the corner”. Every business must attend to their 2021 books one last time, maybe even for the first time this year.
Transactions need to be recorded, accounts must be reconciled and outstanding bills have to be settled and or collected once and for all. A clean set of books gives you an overview of how your business performed over the past year and positions you for a strong start in the new year. Below are three specific advantages to cleaning up your books before the year ends.
Be prepared for a smooth tax season
Figure out what worked this year, what needs to be eliminated and what you can improve
Start 2023 100% certain about your businesses financial status
Be prepared for a smooth tax season
Tax planning is one of if not the main reason your bookkeeping need to be cleaned up before the end of the year. Clean books allows your tax accountant to take your current account balances, add estimated income through the end of the year and arrive at projected taxable income. In many cases, there are financial decisions that you and your tax accountant can make prior to years-end that reduces your taxable income.
Way too many owners and entrepreneurs push off their clean-up work until their tax deadline approaches. By doing your cleanup work now, you’ll have everything ready to hand off to your tax preparer when the time comes. It will make their life much easier and allows them to focus on maximizing your deductions and putting you in the best possible tax situation.
Figure out what worked this year, what needs to be eliminated and what you can improve
Your books tell the story of the past year of your business. By diving deep into your records you can come to understand all the areas of your business that made or lost you money throughout the year. Perhaps a specific sales channel outperformed others? Maybe the entirety of a particular expense was more than you budgeted for? Was your COGS appropriately proportionate to your revenue? These are the types of insights you can get from working on your books at the end of the year.
Start 2023 100% certain about your businesses financial status
Once you understand everything that impacted your business throughout the year, you can use those learnings to improve your operations next year. You can create a thorough budget that will guide you towards a successful 2016. And you’ll have the assurance that you're starting the year with clean and current financial records that you can refer to at anytime.
An updated set of books can provide a wealth of information about your business and prepare you for your tax filing. That being said, doing the clean-up requires a great deal of work.
The good news is Virtual Accounting group can help you start 2023 with accurate and up-to-date books.
Sign up for our bookkeeping services before December 31 and get free set-up and 25 percent off clean-up work. Learn more at