As 2020 draws to a close (thank goodness!), we start looking toward the new year with anticipation. But before you go calling in 2021, let's get this year wrapped!
For many businesses, December 31 also marks the end of their fiscal year, leading to a mad scramble to get everything done at work, and try to navigate the holidays with family.
And even if it's not your year end, the list below will keep you productive and prepared for 2021 during the holiday lull.
1) Reconcile your bank and credit card accounts
Ensure that your bank and credit card statements match with your reconciled accounts. Additionally, review any old uncleared transactions, such as cheques over 6 months old, which would now be considered stale-dated.
2) Review your accounts payable
Now is the time to take a look at who you owe. Are there any old outstanding invoices? Double check that they aren't duplicate entries. Ask your suppliers to send all of their final invoices for 2020, along with a statement of outstanding balances, so you can be sure you've got everything for the year. You'll want to gather any missing expenses to help with your tax liability.
3) Review your accounts receivable
On the other side of the coin is your receivables. Pull an aging receivables report to determine who still owes you. If certain invoices are deemed uncollectable, your accountant may write them off as bad debt. This will help decrease your tax liability next year.
4) Review your financial reports
To give yourself an overall view of your business's performance throughout 2020, pull these three key financial reports: Balance Sheet, Profit and Loss (or Income Statement), and Statement of Cash Flow. Review each for any numbers that seem unusually low or high - this could simply signal a posting error. We recommend comparing these reports with those of previous years.
5) Prepare tax documents for your accountant
Your key financial reports mentioned above will be required by your accountant. Ask your accountant for a checklist of what else they require - this might include your auto expenses and mileage, home office costs, interest statements and other eligible expenses you can claim on your tax return. You can also give your accountant access to your QuickBooks Online file so there's no emailing back and forth and paperwork drop-offs.
6) Backup your technology
Take some time over the holiday break to step away from your computer and cell phone (even if momentarily). You can use this time to do a backup of both, if you're not already taking advantage of cloud-based storage solutions.
7) Do an inventory count
If your business has physical inventory, now is the time to do an inventory count. Consider using an app to assist you. QuickBooks can also help automate your inventory moving forward. Many integrations also exist between Point-of-Sale (POS) systems and QuickBooks and other accounting softwares.
8) Audit and update your website
If you've got a sliver of free time this holiday season, go over your website. Is it user-friendly? Mobile-friendly? Is all of the information up-to-date? Your website is the digital face of your business, so you'll want to take extra care to make sure it accurately represents your brand. If you haven't got a website, take advantage of holiday promos from top website builders.
9) Double check your payroll
Run a payroll summary report for the year. Make sure that your liabilities match up what was reported on your PD7A's. Reconcile any discrepancies. Repeat for WSIB, if applicable. Any differences could indicate that a paycheque was created after a payment was issued to clear your liabilities.
10) Update your contact info
Send out a request to your employees, customers, and suppliers to fill out a provided information form. Make sure that the information received matches what you've got on file. Once it's time to file those T4's and T5018's, this will be important. Also when following up with customers on those receivables, you'll want to ensure you've got the proper contact and not a dead mailbox.
11) Assemble your mileage log
Do you travel for business? You may be eligible to claim your mileage, but you'll need a proper logbook. An app like Everlance can help you with this moving forward, so you won't ever forget to log those kilometres!
12) Plan your goals for 2021
Finally, sit back and envision your 2021. What kinds of goals do you want your business to achieve? What small actions can you take every day to get there? Consider also setting aside dates for company events AND your vacation. That's right - after a hard year of 2020, make sure you plan a week or two away in 2021 to relax and refresh.