Year-End Financials: Setting the Stage for Success

As the year draws to a close, small business owners are busy juggling various tasks, from holiday sales promotions to planning for the year ahead. Amidst the hustle and bustle, it's crucial not to overlook the significance of year-end financials. Properly managing your financials at this time can pave the way for a successful and organized new year. In this blog, we'll explore essential steps to help small businesses navigate their year-end financials.

How ABBL Supports You Through Year-End

As part of our service, we will:

• Prepare your year-end financials on the TAX Basis you file on. Such as a CASH basis or ACCRUAL basis. We'll check your previous year tax return to confirm your basis and have you confirm before year end if any changes have been made.

• In mid to late Febraury we will prepare your DRAFTED financial statements, including:

  • Profit & Loss

  • Balance Sheet

  • Statement of CashFlows (if required)

  • Detail Report of Owners Equity Tranasctions

  • General Ledger in Excel format (depending on transaction volume)

• If you file on an ACCRUAL Basis, we will also include these reports in your year-end financials:

  • AR Aging

  • Customer Open Invoices Report

  • AP Aging

  • UnPaid Vendor Bills Report

• You will get these reports sent to you in an "E-signature," which you'll need to sign off on for approval.

• After you SIGN your drafted finanicals we will CLOSE YOUR BOOKS and set a password so nothing changes after this point without express permission from your CPA

• Now that the books are closed and you've signed off on the Draft Financials, we will THEN send your signed off year-end financials directly to your Tax Preparer/CPA so they know the books are ready for tax prep

• We can also invite your CPA or tax preparer to your QuickBooks file for seamless review and collaboration

• If you and your CPA determine that updates are needed to your financials after the books have been closed, there are two ways to make these requests:

  • Option 1: Your CPA gives us a list of Journal Entries to make on your behalf in the books. We then make these updates for you and redo your year-end financial reports. We then re-send you a new E-signature to sign with the FINAL financials.

  • Option 2: If there are MANY updates to make that require much more than just entering a few journal entries, then you would be requesting that the books be RE-OPENED and that we help you with a one-time backup work project or hourly billed change order to make the additional updates across the last or potentially many periods. This option may be necessary if we have not received feedback on old open TO DO's or Claffify items that are related to UnCategorized transactions. It could also be due to previous periods that were not closed properly (outside the scope of our engagement) that now need to be re-visited and corrected for tax purposes and clean accounting, now that it is determined by your tax preparer that this work is valuable, as it may lead to a tax benefit or clarification.

    
    

Benefits:

External: Smooth and tax-ready year-end reporting delivered directly to your CPA.

Internal: Stress-free handoff with confidence that your records are accurate, complete, and organized.

What should you do when you receive your Drafted year-end financials?

• 1. Review Your Financial Statements: Start by reviewing your financial statements, which include your balance sheet, income statement, and cash flow statement (and potentially other reports like your General Ledger, Equity report, AR Aging, and AP Aging reports if you file on an accrual basis). These documents provide a snapshot of your business's financial health. Analyze them to understand your current financial position and identify any trends or issues. If it does not seem "right," flag it.

• 2. Account for Outstanding Invoices and Expenses: Ensure that all outstanding invoices are accounted for and follow up on any overdue payments. Likewise, record all expenses incurred during the year, even if the bills haven't been received yet. Check your open to-dos; there may be requests related to these. Accurate financial statements are crucial for tax planning and decision-making.

• 3. Reconciled Bank and Credit Card Statements: Our bookkeeping team will reconcile your bank and credit card statements to catch any discrepancies or errors. This process will have been done before you get your financials. This process helps maintain accurate financial records and ensures that no transactions are missed. Check your to-dos to ensure we are not waiting for any missing statements. If so, we will note this on your draft financials and flag that these are required before the reports are used for tax planning.

• 4. Inventory Assessment: For businesses that carry inventory, conduct a physical inventory count to verify the accuracy of your inventory records. This step is vital for accurate financial reporting and tax calculations. The inventory value on your Balance Sheet should be correct on your year-end financials. If it is not, or if you have not yet done your inventory count and provided this information to your bookkeeper, this will be flagged on your finances for your review, and a TO DO may likely be pending. Always provide a year-end inventory count to your bookkeeper at year-end so they can determine the total value of your inventory. It will have a large effect on your Profit & Loss report if this is missing.

• 5. Tax Planning and Preparation: Once you have signed off on your Drafted Financials, now is the time to consult with a tax professional to optimize your tax position. Book a meeting with your CPA and have your signed year-end financials ready. Explore available tax credits with your CPA and deductions to minimize your tax liability. Ensure that you're aware of tax deadlines and submit any required documentation promptly.

• 6. Budget for the Upcoming Year: Based on your year-end financial review, create a budget for the upcoming year. This budget should include revenue projections, expense estimates, and financial goals. A well-structured budget can guide your business decisions and help you stay on track financially. Our Gold and Platinum clients can use the Value Builder portal to list these goals for the new year.

• 7. Assess Your Business's Financial Health: Take a step back to assess your business's overall financial health. Consider factors such as liquidity, solvency, and profitability. This evaluation can help you identify areas that may need attention in the coming year.  Our Gold and Platinum clients can use the Value Builder portal  to get clarity around this.

• 8. Plan for Growth: Use your year-end financial analysis to set growth objectives for the upcoming year. Whether it's expanding your product line, increasing marketing efforts, or entering new markets, having a clear financial plan can guide your business's growth strategies. Remember to plug your plan into the Value Builder portal so you can use these insights throughout the year and watch your business transform!

• 9. Ensure you are in compliance:   Make sure you have filed any annual information returns to the federal, state, and local governing bodies. New reporting requirements like the BOI Reporting may be due before year-end, especially if any of your business information or ownership changes. Check your TO DOs, Questionnaires, and e-signature requests in your client portal. That's where we will let you know if you have any requirements we're aware of (depending on your level of service with us).

  
  

• 10.  Seek Professional Assistance:   If managing year-end financials feels overwhelming or time-consuming, be sure to book a meeting with our team so we can go over your numbers and provide guidance and explanations. Our expertise can ensure that your financials are accurate, compliant, and well-organized.

If you want a simpler year-end process—and a team that handles this with you instead of for you—A Bigger Bottom Line LLC (ABBL) is here to support you. Our cloud-based bookkeeping ensures clean books, timely reporting, and insights that help your business grow with clarity and ease.

Contact ABBL today to discuss how our services can support your business's financial success in the coming year and beyond.

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