As the weather turns colder and the schedules fill up with holiday events, bookkeeping tasks are probably the last thing you want to be thinking about as a small business owner. But 2023 is just around the corner - and so is tax season!
We’ve compiled this list of 8 bookkeeping tasks you should complete before 2023 to make sure you and your business are in tip top shape for the new year.
1. Clean Up Your Files
All businesses should start their year end bookkeeping activities with cleaning up their files. Throughout 2022, you may have let your inbox pile up, gotten lax with your filing, or swore off digitizing your receipts all together.
We get it - sifting through the unorganized files you dropped onto your desktop to deal with later is a scary thought.
But getting your files organized means that you will have the most accurate data about your small business and how it has performed this year. Without clean financial data, you won’t be able to make the best decisions as a business owner.
Take the time to go through your paper and virtual files. Scan in the important paper documents and shred the rest. Establish a naming convention for your digital files and folders. Then back up all of your files - both on a physical hard drive and in the cloud.
If you need a little help with this, check out our article on the first steps to cleaning up your files. We also offer file clean up services to take this task off your list.
2. Reconcile Your Receivables
Of the bookkeeping tasks you should complete before 2023, this is one everyone can agree is important: make sure you are getting paid!
You’d be surprised how many business owners put off sending out invoices to their clients. Whether you trust your customers to send in their payments or you just don’t have time to get the invoices generated, putting off this task can mean a struggle for your small business.
Your accounts receivable balance is the amount of money your customers still owe you. Before year end, send a reminder email to any of your outstanding accounts with their balance details. If you enforce late fees, add them to any invoices past the due date. Then make a list of anyone past the 90 days mark for whom you may need to begin the collections process.
Shoot us a message if you need a great collections agency recommendation to help get that process started.
3. Reconcile Your Payables
After your receivables are updated, sort through your payables. These are any bills you owe to vendors. As you just did in the last step, vendors will probably be reaching out to you for any bills you have outstanding.
If you use QuickBooks™, take advantage of their reporting capabilities to generate the list of invoices you still need to pay. Figure out when and how you plan to pay them.
You should also take this time to prep your T4As and T5018s. Canadian businesses need to send out summaries of the payments they’ve made to freelancers and independent workers (or in the case of the T5018s, contractors who’ve received $500 or more). Make sure you have their Business Number or SIN on file!
4. Audit Your Payroll
If your small business has employees, year end is a great time to update their payroll and benefits information.
Throughout the year, many different life events take place that may require a change to their information like marriage, moving, and new family additions. Check in with your employees to make those updates.
Also, take the time to check in with your payroll and benefits providers. Skim through your policies to see if there are any benefits you want to add or any you don’t utilize. Removing unused benefits from your package could net you some savings!
5. Review Your Assets
Next up on bookkeeping tasks you should complete before 2023: reviewing your assets.
Did you purchase any new assets for your small business this year? Did you get the asset’s info over to your accountant? This is an important step to ensure your accountant has all they need when they file your taxes.
6. Review Your Cash Flows
Understanding where your cash is coming and going is crucial for business owners. Your statement of cash flows will tell you just this: inflows are your revenues and outflows are your expenses.
When you have more outflows than inflows, you could be in trouble.
Look at what expenses you may need to cut back on if your outflows are a little too high. Analyze your customers and business segments to see which provided the most cash inflows throughout the year.
7. Update Your Goals
New Year’s resolutions can be for your business, too! Review this past year’s goals and see how many you achieved. What strategies worked best to meet those goals? Which goals were not met and why?
For the last of the bookkeeping tasks you should complete before 2023, make a fresh set of goals for your small business and brainstorm on how you can achieve them.
At Simcoe Office Solutions, we love wrapping up the year for our clients! Reach out today if you need help finishing these bookkeeping tasks you should complete before 2023.