Mastering Your Finances: Essential Bookkeeping Tips for December and January

Why December and January Matter for Your Business

Do you find yourself struggling in December and January to get everything completed and entered to give to your accountant? NOW is the best time to start tackling this issue to get it under control. Taxes can be stressful, and if they are not filed on time, they can be costly as well.

One of the key advantages of working with Brevard Bookkeeping is my extensive experience in the industry, with over 25 years of expert knowledge. This means that you can trust me to handle your finances with precision and efficiency. You will have the peace of mind to focus on other aspects of your business.

While QuickBooks is a great option, it's not always the right fit for YOUR business. Let me help you prepare for this year's tax season. I can assist you with the following services and more.

| Services Offered | Additional Services |

|------------------|---------------------|

| Bank & Credit Card Reconciliation | Entering Expenses (receipts) |

| Setting Up a Chart of Accounts | Cleaning up your accounts |

| Payroll | Payroll Taxes, Quarterlies, etc. |

| Accounts Payable & Accounts Receivable | Monthly Financials |

The Importance of Bank Reconciliation

Reconciling your business checking account each month allows us to keep your bank account, accounting, and taxes up-to-date. Having us reconcile your account each month allows you to:

• Identify lost checks, lost deposits, and unauthorized wire transactions.

• Detect and prevent excess or unjustified bank charges. This ensures transactions are posted correctly by your bank.

• Detect and prevent embezzlement of funds from within your company.

• Know how your business is doing. You can't really know unless all accounts are reconciled and properly accounted for on your financial statement.

• Manage your cash more effectively. Proper management of funds not only saves money but also makes money for you.

• Protect yourself. By timely reconciling and promptly objecting to your bank about any unauthorized, fraudulent, or forged checks presented to your bank, you can relieve your agency of responsibility for the shortfall and transfer the risk to the bank. This reason alone should be enough to reconcile. Crime exists.

• Sleep Better. You will sleep more peacefully at night knowing your bank accounts are reconciled, in balance, and that all escrow funds, accounts, checks, and disbursed funds are properly accounted for.

  
  

Understanding Your Income Statement

An income statement, otherwise known as a profit and loss statement, provides an itemized list of all your revenues and subtracts an itemized list of all your expenses to determine a profit or loss for the period. An income statement allows you to:

• Track revenues and expenses so that you can determine the operating performance of your business.

• Determine what areas of your business are over-budget or under-budget.

• Identify specific items that are causing unexpected expenditures, such as phone, fax, mail, or supply expenses.

• Track dramatic increases in product returns or cost of goods sold as a percentage of sales.

• Determine your income tax liability.

  
  

The Role of a Balance Sheet

A balance sheet gives you a snapshot of your business's financial condition at a specific moment in time. A balance sheet helps you:

• Quickly get a handle on the financial strength and capabilities of your business.

• Identify and analyze trends, particularly in the area of receivables and payables. For example, if your receivables cycle is lengthening, you may need to collect your receivables more aggressively.

• Determine if your business is in a position to expand.

• Assess if your business can easily handle the normal financial ebbs and flows of revenues and expenses.

• Identify if you need to take immediate steps to bolster cash reserves.

• Determine if your business has been slowing down payables to forestall an inevitable cash shortage.

  
  

Balance sheets, along with income statements, are the most basic elements in providing financial reporting not only to your accountant but also to potential lenders such as banks, investors, and vendors who are considering how much credit to grant you.

Preparing for Tax Season

As tax season approaches, it’s crucial to prepare adequately. Here are some steps to ensure you are ready:

1. Organize Your Documents: Gather all necessary documents, including receipts, bank statements, and previous tax returns. This will make the filing process smoother.

   
   

2. Review Your Financial Statements: Take a close look at your income statement and balance sheet. Understanding your financial position will help you make informed decisions.

   
   

3. Consult a Professional: If you feel overwhelmed, consider consulting a bookkeeping professional. They can help you navigate the complexities of tax preparation.

   
   

4. Stay Informed: Tax laws change frequently. Stay updated on any changes that may affect your business.

   
   

5. Plan Ahead: Don’t wait until the last minute. Start preparing early to avoid the stress of last-minute filing.

   
   

By following these steps, you can make tax season less daunting and more manageable.

Conclusion

In conclusion, December and January are critical months for your business's financial health. By prioritizing bookkeeping and financial management, you can alleviate stress and ensure a smooth tax season. Remember, the right support can make all the difference. Let Brevard Bookkeeping help you navigate this important time with ease.

For more information, feel free to reach out. Your financial peace of mind is just a call away.