November 20, 2020
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Is your business ready for year-end?
The end of the year brings winter weather, holidays, new year hopes—and for small business owners, it also comes with some accounting and management tasks. Here’s a quick checklist of 12 to-dos that will ensure your business is in order for the end of the year:
- Gather and organize your receipts. Your account will thank you.
- Review your bank and credit card statements and make sure everything adds up.
- If you have physical inventory, take stock and make sure it lines up with your balance sheet.
- Look over your accounts receivable and invoices. Are all your payments in?
- Read through your Profit and Loss statement.
- Verify employee and contractor data to ensure you file tax forms correctly.
- Confirm your employees’ benefits information.
- Collect Forms W-9 and 1099 from your vendors and contractors.
- Payroll watchouts: Make sure you’re withholding taxes for fringe benefits, deferred compensation, and end-of-year bonuses.
- Give your team a heads up about deadlines to use time-bound benefits, like funds from flexible spending accounts (FSAs).
- Plan ways to celebrate your team!
- Finally, check if you qualify for popular deductions, like home office, travel (if any), and mileage.
Read through our year-end guides to make sure your accounting, taxes, and employees are ready for 2021.
BONUS — Here are a few benefits changes to be aware of come January 1, 2021:
- New IRS retirement plan limits: Maximum combined (employer and employee) 401(k) contributions will rise by $1,000.
- Higher HSA limits: Health savings account (HSA) contribution limits are increasing by $50 for self-only coverage and $100 for family coverage in 2021.
The gist from Gusto
This week, we asked Caleb Newquist, Gusto’s Editor-at-Large and a former CPA who is passionate about helping small businesses, about his one word of advice for small businesses heading into year-end:
One of my fondest memories of being a young accountant was when my manager would drop by with a shoebox filled with receipts and printouts with little to no context. It was my job to sort through all this paperwork, make sense of it, and to prepare a clean, comprehensible financial statement or tax return in a few hours for one of our small business clients.
Hahahahahahahaha. Just kidding, this was the bane of my existence as a young accountant. These types of assignments gave me nightmares; numbers and spreadsheets swirled around my head while I sat in a chair of fire. Prior to having young kids, those were, without a doubt, the worst nights of sleep of my life. The following day it would take every ounce of willpower I had to not chuck that shoebox in the trash in righteous indignation. I relished the thought of losing my job because I took a stand against sloppy recordkeeping.
This dramatic flameout never occurred, I’m sorry to say, but I still harbor some contempt for those businesses who dropped off shoeboxes at our office like they were making a run to Goodwill. “See if you can make use of this. Later!”
These days, there’s no excuse for shoeboxes filled with receipts. Online accounting software makes bookkeeping, even for small businesses on tight budgets, a breeze. What’s even better is if you work with an accountant, you can grant them access so that when the numbers do get messy, they can jump right in and tidy things up.
Best of all, Gusto integrates with several popular accounting programs, so your payroll and benefits data will pass seamlessly into your general ledger. If there’s one thing you can do to better organize your business in 2021, it’s to get your numbers into a cloud accounting program. Not only will your books be in the best shape they’ve ever been, but young accountants everywhere will rest much easier.
Picks from our partners: #BuyBlackFriday
More than 40% of Black-owned businesses have closed since the start of the pandemic. This holiday season, you can help support them while appreciating your friends and family. Our partners at the U.S. Black Chambers (USBC) worked with Facebook to create a #BuyBlackFriday Gift Guide, featuring a variety of gift-perfect products from Black-owned businesses.
Top relief options for the week
- Fiserv #Back2Business grants are now available to businesses in New York. In response to the economic challenges brought on by COVID-19 and civil unrest, Fiserv will award grants in the amount of $10,000 to Black- and minority-owned businesses that have been impacted by COVID-19 and social unrest.
- Hennessy has contributed an additional $1 million to Unfinished Business, a program aimed at helping Black, Asian and Latinx owned small businesses with the financial and educational resources to power through challenges of COVID-19. Applications are open through November 23, 2020.
- City of Springfield is launching an online application for their Small Business Assistance Grant program to help small businesses impacted by the COVID-19 pandemic. Eligible small businesses can receive a one-time grant of $5,000. Applications are open through November 30, 2020.
- See more relief options in our Small Business Relief Finder.
Want more small business news and resources? Check out past editions in our archive.
