A New Year is Coming. Prepare in October.
October doesn’t seem like the end of the year. Depending on where you live, it might not even feel like fall. However, December is just around the corner and October is the ideal time for small business owners to start their end-of-year preparations. It might seem excessively early, but hear me out. December is, essentially, a lost month — no matter how good our intentions are. Holidays, school vacations, and family obligations combine to create chaos. Happy chaos, hopefully, but still chaos. You’ll have an almost impossible time getting on anyone’s calendar in December, and the last two weeks of November are just as bad.
Which brings us back to my advice: start preparing in October. An early start lays the groundwork to set your important meetings in the fall — before you start losing people to the holiday fog. Don’t get too stressed. Year-end preparation is one of those tasks that can sound more daunting than it really is. Preparing for the end of the year doesn’t have to be complicated, especially if you have the luxury of time.
Come October, you should start:
UPDATING AND RECONCILING YOUR BOOKS
This step generally takes the longest and has the most potential to create other tasks. I suggest tackling your books first. Starting in October, do a little bit each week. If you can only begin one portion of your year-end prep early, make it this one. The extra time allows for a more thorough review, which makes it more likely that you’ll discover any and all issues that need addressing. If you do uncover discrepancies, then you’ll be thrilled to have the time to resolve the problems without panic or late nights.
IDENTIFYING YOUR 1099 CONTRACTORS AND MAKING SURE YOU HAVE THEIR W9S
Many small business owners rely heavily on contractors. Hopefully, if you utilized contractors, you made sure to get their 1099s before they started working for you. But, sometimes people fall through the cracks. This is particularly common when the contractor was only completed one small task with a quick timeline. A missing 1099 has the potential to be a bigger headache than you would think — one 1099 probably isn’t a huge priority for a contractor going through their own busy season. You don’t want to end up in a situation where you’re hounding a contractor that did a project for you in March for their W9 in December. So don’t leave your 1099s until December. Work through your list in October, and avoid a time-crunch.
PLANNING FOR NEXT YEAR
If I can state the obvious, you can’t plan for next year until you know how this year went. For example, you need to know if you’re in a situation where you must take action to avoid a crazy tax bill. It’s much easier to take that action in October than December. In this example, I can almost guarantee that you aren’t your accountant’s only client. If you don’t start thinking about your upcoming tax bill until early December, there is a decent chance that you won’t get in front of your accountant until December 27th. This timeline leaves you with literal days to make the decisions necessary to alleviate your tax burden.
Don’t do that to yourself. If you get a jump start of preparations, you can spend October talking to your accountant. Then make purchases or invest as necessary in November and December. You’ll make better choices, and will feel more in control.
More than anything else, starting early gives you the freedom to make good choices. At Office Accomplice, we are big fans of good choices. If you’re feeling overwhelmed, just reach out. We’re experts at helping small business owners work through their end-of-the-year bookkeeping tasks and are happy to discuss how we can take a bit off your plate this fall. After one year of preparing before the leaves start changing colors, you won’t be able to imagine doing it any other way.
