WEEKLY EDITION DEC 20, 2017
Preparing Your Business for 2018…continued
Adapted for the PSAI by Executive Director Karleen Kos from "End-of-the-Year Checklist for Small
Businesses" by Megan Sullivan
Here are some things to do before the end of the year.
Accounting
This is where you spend the bulk of your time at year's end to get your business in order. Managing your financial records is
critical throughout the year, but even more so in December. By maintaining excellent records and keeping them in order,
you'll help yourself and your accountant (if you have one) when tax time rolls around.
1. Run a Few Standard Reports. Take this the time of year to assess where you stand financially and how that compares
to previous years. Using your accounting software or looking through spreadsheets or other records you keep, you
want to generate a complete financial report, which typically consists of a profit and loss statement, a balance
sheet and your cash flow statement.
Your profit and loss report is key. This is the best way to tell where your business stands financially and what your
outlook is like for next year. You also want to look at your profits for the year. Is it larger than expected? If so, it might
be a good time to make some larger purchases for which you can record future depreciation.
Talk with your accountant first to make sure you have the cash on hand to make the purchase, and make sure you
fully understand depreciation rules.
2. Analyze Your Cash Flow Statements. Cash flow is the best way to tell how your money was spent throughout the
year. You'll want to take a look at three specific aspects of your business' cash flow:
• Cash flow from operating activities (i.e. revenue and expenses)
• Cash flow from investing activities (i.e. assets purchased and assets sold)
• Cash flow from financial activities (i.e. loans and repayments)
3. Verify Your Vendor Information. Take a look at all of the vendors in your system, and verify that the contact
information, including phone number, email address and contact name are still correct. Also, purge the system of any
inactive vendors or inaccurate information. Or if time
permits, evaluate whether or not they're worth
reconnecting with, and act accordingly. Make sure you
have IRS 1099 forms for the relevant vendors.
4. Reconcile Accounts Receivable. You should have a
running list of what invoices are still unpaid or which
clients still owe you money for work already completed.
If possible, chase these outstanding bills and try to
collect before the end of the year. This will help with
cash flow and give you a clean start for the new year.
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