Top Year-End Accounting Questions to Save Money

Many business owners find themselves juggling multiple tasks at the end of the year as they try to close out their financials. Asking the right end-of-year (EOY) questions can reduce stress, help clean up their books, and even uncover tax savings. Below are ten questions that will help business owners finish out the year strong.

1. Are My Bank Accounts Current?

Reconciling bank accounts is essential to avoid missing deductions and ensure accurate financial records. Checking for discrepancies can save you from potential headaches come tax season.

2. Can I Collect My Open Receivables?

Uncollectible receivables should be written off. This helps clean up your books, ensuring you won’t pay taxes on revenue you won’t receive.

3. Do I Have Any Old or Obsolete Inventory?

Writing off old or obsolete inventory can free up storage space and eliminate unnecessary insurance costs. It also helps clean up your balance sheet.

4. Did I Dispose of Any Assets?

Review any asset disposals or sales for the year. Consider the tax implications like write-offs or gained income. This can impact your financials significantly.

5. Have I Included All Unpaid Bills?

Unpaid bills that aren't properly recorded in accounts payable can lead to missed deductions. Ensuring all is recorded can prevent issues down the line.

6. Have I Included All Payroll Benefits for the Year?

Review payroll benefits such as bonuses and retirement contributions. This prevents complications during tax filings and ensures all compensation is accurately reported.

7. Do I Have Any Errors in My General Ledger (GL) Accounts?

Reviewing the general ledger to spot any errors is crucial. Missing deductions or unrecorded transactions can lead to inaccurate financial statements.

8. Am I Missing Any Debt?

Verify that all debt or financed purchases are recorded correctly. Remember, deductible interest payments can decrease your taxable income.

9. Have I Recorded All Credit Card Purchases?

Capturing all credit card transactions ensures all expenses are accounted for. This avoids missed deductions and keeps your financial records accurate.

10. Should I Make Any Year-End Purchases?

Making strategic year-end purchases can help reduce taxable income, especially if your business has had a profitable year. This is a good strategy for managing your tax liability.

Taking action on these questions can vastly improve your year-end review process. Proactively preparing for tax season is crucial for stress-free financial management. Contact our professional accounting firm for guidance and ensure you close out your year with confidence.