Year-End Checklist for Your Small Business

When the end of the year draws near, you should start preparing your financial records for tax season. This gives you an important view into how profitable your business is and helps you plan for the future. 

Whether you have an accountant who manages your financial books or take on this task yourself, the following checklist for small business owners can help you wrap up the year with confidence.

1. Organize your business expense records.

Few people enjoy sorting through a pile of receipts, statements and balance sheets at year’s end. Save time by implementing a filing system and/or accounting software for tracking business expenses.

2. Evaluate your business’s financial performance. 

Analyze your company’s success by looking at profit and loss (P&L) statements. This is your business income (revenue or sales) minus expenses over a specific period. Revisit your goals for the current year and consider any last-minute changes that could boost performance.

3. Take inventory. 

If you sell products, carefully review what you have in stock. This will help you understand how much of your business capital is wrapped up in inventory. You may also want to take an inventory of assets like office equipment and supplies so you can better separate personal and business finances and budget effectively for the coming year.

4. Look at your financial liabilities.

Review current and long-term liabilities, including accounts payable (money your business owes to vendors, contractors and suppliers), credit card balances and loans from financial institutions. Look for ways to efficiently manage debt to keep your business in a strong financial position. You may find that you need to take on additional debt—such as a line of credit—to grow your business.

5. Review your business tax strategy.

It’s never too early to review the rules and consider ways to save on your tax bill in the next calendar year. You might act now to increase your deductions or reduce your revenue. For example, you could choose to buy equipment, make charitable donations or defer revenue into the next year. 

Be sure to consult with your tax advisor before taking any action that could affect your tax situation. Get ready for tax season now by organizing receipts and other documents you’ll need to be prepared for filing your business tax return.

6. Update your small business plan.

When you’re crunching the numbers and reviewing your financial reports for the previous year, you might find sales cycles or other trends you’d like to repeat next year. You may also notice gaps in the revenue stream or challenges you’d like to work on in the following year. Use the data you have to set specific goals and map out your business plan for the next year and beyond.

Wrap up the fiscal year with confidence

At Navy Federal Credit Union, we’re here to connect you with the resources you need to finish the year strong. Learn about our business solutions designed to support your small business and employees, and stay in-the-know with our small business education resources.