The end of the year is always crazy for companies, regardless of whether or not the company is part of the holiday rush of gift giving. You have to figure out your taxes and generally make sure that your finances are squared away as the fourth quarter ends and you enter into a new year. Here are some accounting tips for the end of the year.
1. Decrease Your Taxes
The first thing that you are going to want to do is to set up a time to meet with your accountant and discuss your current tax situation. You will want to consider a few different things. The first factor that you want to consider is when you are going to request to have your outstanding accounts paid. If you push off payments until the first day of the year or later, you are going to be able to make sure that you pay as few taxes as possible going into the new year because those payments won't count until the following year's taxes are due.
You are also going to want to increase your expenses in order to make sure that you can maximize your deductions. This means that if you need to purchase new equipment, machinery, or maintenance services, you are going to want to try to make sure that you get these in before the end of the year in order to ensure that the deductions count on this year's tax return.
Finally, if you have been planning to make any donations, ensure that you make them before the end of the year in order to ensure that the tax deductions from those donations count for this year's tax returns.
2. Close Your Books
Once everything is ready to go, you are going to need to close your books. Unless you are a company that is constantly open throughout the holiday season, you are likely going to have some time before the holidays off, as well as the time between the holidays and New Year's Day off. If you are in this situation, it is in your best interest to close your books as soon as possible in order to decrease the complexity of your taxes. Make sure that you set up a new accounting book in order to ensure that you are able to start the new year immediately.
If you are a company that is open up until the new year on a regular basis, you are not going to be able to close your books. Instead, create tentative ending points for your books so that, if by some miracle you don't need to update your books, you will be able to close them immediately and not have to stay late.
For more information, talk to a professional managerial accountant like Dale K. Cline, CPA PLLC.