Now that a brand-new year has arrived, you'll find countless individuals making lists of resolutions — with items ranging from losing extra pounds to finding a higher-paying job. But New Year's resolutions aren't just for people; they can also serve businesses just like yours. Here are some New Year's resolutions you might want to adopt in your bookkeeping practices so that you can enjoy a more productive and prosperous business.
"Resolve to Be Ready for Those Business Tax Deadlines."
April 15th is just one of many tax deadlines that business organizations have to meet throughout the fiscal year. Those W-2 and W-3 forms, for example, need to be filed by January 31st, while 1099 forms should be sent to the IRS by February 28th. There's also those pesky quarterly federal tax returns to think about, plus any state franchise or other taxes you need to file. The sooner you go through your books and prepare the necessary documents for your accountant, the more smoothly the rest of the year is likely to go.
"Resolve to Re-Shop Your Vendor Agreements."
Relationships change over time, whether they involve romantic partners or business associates. When was the last time you examined the vendor and service agreements your business maintains? Close inspection might reveal that the rates you're getting (and/or the fees you're paying) no longer compete with what the market can offer, or that your own needs have changed to the point that you need different providers altogether. Now's the time to stop assuming the best, cast an objective eye on these relationships, and make any necessary course corrections while the business year is still young.
"Resolve to Reevaluate Your Accounting Methods."
Even the most junior bookkeeper or accountant understands that there are different ways to count income and expenses. Has your previous accounting method made sense for your needs, or has it actually been working against you? Businesses that generate less than $5 million in annual sales are free to use either the cash method or the accrual method of accounting. The cash method, in which you simply record income upon its receipt, is relatively streamlined, straightforward and easy to keep up with. The accrual method, in which you record income and expenses according to when they're due to be paid, is more complex — but it also gives you a more accurate snapshot of your business's financial health. Ask your provider of bookkeeping services whether you might benefit by switching from one method to the other.
Take the time to start your new business year off right. Make some smart resolutions to manage your accounts in the most intelligent way possible.
Contact a bookkeeping service today to learn more.