Client Guide to Year End for Your Accountant

The end of the year can be a stressful time for everyone; between the holidays, New Years’, and the dreaded tax season that looms over for April. As an accounting firm, we have our procedures in place for year end, but that could mean more ‘work’ from clients to obtain everything we need. Instead of all the back and forth, here are some ways to ensure your business is all set for your accountant and CPA at year end and why it’s important!

Gathering Documents for Year End

The type of business you own may require more things for year end, but there are many documents required for everyone. For starters, bank (and loan!) statements for the whole year. It seems obvious, but you may have missed one, or maybe you’ve been so busy you have forgotten to send the last few. Whatever the case may be, checking that your accountant/CPA has all your statements can save everyone some time. Furthermore, we require statements for every active business account and for each of those accounts, we need statements for every month. If a statement for December ends any time before the 31st, we will need January’s statement (the following month after December, into the new year) as well. Often, you see this with credit cards. For instance, your CC statement may end on the 9th every month. To accurately reflect the whole year for this account, we would need January 9th’s as it has information for December 10th to the 31st.

Next, if you do any type of contract work, confirm that you have all the needed W9s from each contractor. (Note that there are certain exclusions to this, so be sure to double check with your accountant/CPA if you are unsure or have any questions!) After that, review your transactions with no Vendor name. (In QuickBooks Online, also known as QBO, the Vendor is referred to as the person or business that that transaction went through. So if you bought food at Walmart, for example, the Vendor would be Walmart.) This is not as essential as the other tasks in this blog, but it can be important, as we’ll discover in the following section. Finally, review any other reports that your accountant/CPA may be missing that you want recorded in your books. For example, for many of our clients, we break-apart their sales to accurately reflect all the different types of things they are selling. These break-aparts always come from a report that, more often than not, the client is sending over to us. Now that you have a list of some of the vital documents needed, you may be wondering, “Why?”.

So WHY do we need all these things?

If you are unfamiliar with accounting, you may be questioning why all of these things are so important. You know that you have to hand these things over, but you are unsure what the exact reasoning is. First off, reconciliation is the process of using financial statements to verify, correct, and accurately reflect your current financial situation. In essence this means having bank statements allows us, the accountant/CPA, to make sure that your accounting software, (for us, we primarily deal with QBO), is reflecting what the bank is telling us you have done with your account throughout the year/months. This is why it is SO important to send over statements every month. We must see if the statements align for each individual month, and if we need to correct anything, we have to know all the transactions in said month from the bank statement.

Another thing a good accountant will need is all the W9s from contractors you’ve paid over the year. When you are an employee, you fill out a W2; if you are a contractor you fill out a W9. After a W9 is received, we can file 1099s- which is a tax form that shows different type of income that are not from employees. It is important that your business has all the W9s it needs so you, as the business owner, are not liable for any untaxed income on their part. Without a W9, there is no way to file a 1099, and thus you have no proof as to whether that money they received was ever taxed- which makes you liable for it. Finally, and although it is not a major issue, cleaning up your “Transaction without Payees” tab in QBO can be important. (Adding a Vendor as we talked about earlier.) Let’s say you have a $5.000.00 transaction coded as “Contract labor,” but they have no Vendor, how will we know who’s W9 to give? Additionally, cleaning up the Vendor list can verify that transactions are coded properly, and make your Book Review tab, in QBO, look cleaner!

Wrapping Up the Year End for Everyone!

Keeping these things in mind for year-end is helpful for everyone, but do not be afraid to ask your accountant or CPA any questions you may have! We are here to help your business grow and flourish through good financial planning! As a final parting note, it is a good habit to send all documents needed monthly, as well as checking in and reviewing these items throughout the year, to make year end easier on you as the business owner. This also allows time for a more in depth discussion about your financial reporting and how you can use those numbers to make better financial decisions in your daily operations.

Organizational Structures & General Organization Importance in Business

According to the Wall Street Journal, office workers waste an average of 40% of their workday. “Not because they aren’t smart, but because they were never taught organizing skills to cope with the increasing workloads and demands.” With such a large number of individuals lacking organizational skills, it is crucial to have an organizational structure in your business and assure you have organizational skills in your life.

Different Organizational Structures in Business

An organizational structure determines how an organization is set up to deal with responsibilities, roles, decision-making, and who will report to who. Organizational structures are broken apart into two categories with the first one being Centralized versus Decentralized. This is also described as a vertical structure. Centralized is popular among businesses as this structure has a very clear chain of command and understanding of their roles, responsibilities, etc. Decentralized structures allow an individual in a business to have more independence in their group/team with their decisions and these individuals or teams may reach out to others within the business to further their work or goals. This structure may work well for a business that is constantly adapting and changing. THis structure may also be referred to as a flat structure. The other category of organizational structures is Hierarchical vs. Circular. The hierarchical structure is the most commonly seen in business with the triangle shape. With the triangle shape in mind, the top will be one person as the highest in command with each person falling under it having a supervisor. As you go further down, it leaves employees with less and less decision-making, responsibility, etc. A circular structure is similar but instead of that triangle shape, you’re looking at a circle where the next ‘ring’ is the next level of management. Although all organizational structures fall into these categories, there are many variations of these structures out there when deciding what suits your business best. To give you an idea and some examples of organizational structures; we’ve included a set of pictures below.

(All pictures credited to Forbes)

Why Organizational Structures are Beneficial

Having a clear organizational structure is important for many reasons. For starters, it allows everyone to have a clear understanding of their expectations and holds individuals accountable in their roles. Additionally, with everyone knowing their place in the organization, it can improve efficiency; especially as a business grows and every part of the organization becomes more specialized in what they’re doing. Depending on your organizational structure it may also encourage growth in employees and stimulate more collaboration throughout the organization.

Personal Organization is Vital

Being organized in the workplace can be just as important as your day to day life. First off, organization can help you to create a daily routine. Having a routine can allow you to be more comfortable and reduce feelings of stress and disarray in the workplace. Furthermore, this routine can aid in making you feel more prepared for each day; thus saving time as you don’t have to make as many decisions and already know what you need to do. Another way organization is beneficial is that it can improve work relationships. By being organized, you can spend less time honing in on deadlines and may have more time to attend work events or collaborating with your co-workers; therefore improving your work relationships. Good organization also fosters problem solving as it makes you realize possible problems before they become an issue. Organization can also combat stress from burnout, forgetfulness, and lack of time management.

Keeping everything organized can also be extremely valuable when it comes to the end of the year. Knowing where all your tax statements, receipts, and other important documents can save you additional stress and prevent wasting time searching for things that should have been filed away correctly throughout the year. Moreover, if your business gets audited, not having the appropriate documents can create more issues, cause unnecessary hassle, and may even cost you money. There are numerous other ways that organization can improve business that are not mentioned here – showing that organization is such an essential part of everyday life.

Organization & Organizational Structures are Paramount

Having a defined organizational structure in your business and ensuring you are organized in your life prevents extra stress, wasting needed time, and benefits you in many ways with productivity, good health, and much more!

Building Your Business for Success

A study by Guidant shows that a little less than ⅓ of business owners said that their biggest motivation for starting a business is that they are ready to be their own boss. If you’ve decided that you want to open your own business, there are numerous ways to create a successful business, but the first place to start is defining success for you.

What does success mean to you? How do you create a successful starting ground for your business?

When first thinking of creating a business, many of us have different motivating reasons why but, of course, we all want to be successful. Success for many of us means profit but success could also mean you want to help people (solve problems) or you’re extremely passionate about sharing your hobby with others. Defining success for you is the first step in creating value in your business. This is a critical step because knowing what success means to you allows you to focus your time and energy on what matters most (to you). Even with our different definitions of success, there are quite a few things that help make a business successful.

For starters, have a strong business idea. You will want to pick a good, niche thing in your industry of choice. This means picking something that isn’t too specific nor too broad. Digging deep and learning more about your niche may help you to decide what exactly you are putting into the market to help everyone and allows you to become more knowledgeable in your future business overall. Furthermore, bear in mind the current market demand for your product/service. (Does your target audience want/need this? Is the market already over-saturated with this?) When you have a general concept of what your business idea is, consider talking to your friends and family. They may give you valuable feedback that is more suitable and aid in looking at the possible faults of your idea. After you’ve solidified what your business idea is, be sure not to over-sell your product/service. Over-selling could mean falsely advertising things your product doesn’t actually do or setting a bar too high and going over your area of (current) expertise. Also, set clear policies for everyone. By doing this from the beginning, it can reduce confusion for everyone and protect you from potential conflict down the road.

Defining success & having a solid, concrete idea is just the beginning of owning a business. Even though there are many factors in the success of a business, there are plenty of ways to make your business shine!

Business building tips for success

As is life, there are many factors outside of our control that can influence the success of our business. By being proactive to these outside influences, you can enhance your business for success. To begin, your leadership and the team behind you are vital. As a business owner, be sure to practice intentional kindness. A good leader is kind as well as honest, transparent, and genuine. Kindness plays into how customers perceive your business as well as employee morale. (Refer to Kindness & Its Value In Your Business as we covered more about kindness & the value it brings to your business!) When you are a great leader, your team benefits, too. As we covered in Well Put-Together Teams & Their Significance, having a high quality team boosts profit, productivity, and helps all business relationships flourish!

The next essential part of your business are the customers. When handling customers, remember that you are the leading expert in your business, so be sure to look at your products/services from their point of view. Understanding where a customer is coming from can mitigate any challenges that may come up. Although you should try your best to solve any issues before they reach the customer, it is inevitable that problems will arise from time to time. Spending time to make sure employees are especially equipped to deal with customers can create a better experience for everyone involved. Additionally, if an employee brings feedback about the customer service back to you, truly hear them out and take action to resolve the issue so it doesn’t happen again. Another way to enhance the customer experience is connecting with them via gifts (like nice baskets from your business or a simple hand-written thank you) because this creates a personal connection and makes the customer feel even more significant to your business. Finally, who doesn’t love a great deal? Hosting deals like BOGO (Buy one get one free), having a free trial period, and creating loyalty or referral programs incentivizes customers to spread the word about your business and be rewarded for it.

Moving to our next point, make sure your business reflects you as a person. Your morals should clearly be reflected in the company and your personality should radiate through! An impactful way to show who you are through your business is in your advertising and marketing. By being authentic in your social media posts, those who resonate with your morales will be more drawn to your business – attracting them and possibly others to your business. In addition to original content, try to include more than just ads or promotions. Having segments where you give something, like a guide to a monthly calendar if you’re in the fitness industry or a weekly column where you write up advice in your industry, can make your social media more appealing. Additionally, in our digital world, traditional marketing is often getting left behind. In a 2017 study by MarketingSherpa, consumers were asked what ads they trust the most. The top scoring categories include: print ads (82%), TV ads (80%), mailer ads (76%), radio ads (71%), and ads in public places (like billboards or posters) (69%) while the lowest scoring ones include: online pop-ups (25%), podcast ads (37%), and mobile phone ads (39%). This goes to show that traditional marketing is still as beneficial as digital marketing! For more tips on how to market yourself and your business digitally, you can refer to one of our previous monthly blogs: Advertising & Marketing For You and Your Business.

Taking on a new business can be daunting and overwhelming by yourself. Although it is often appealing to independent business owners to do everything themself, (to try to save money), it is in one’s best interest to hire others to ease the load. Besides employees of course, an accountant can be a valuable asset for your business. Accountants guide you in the right direction to make your company more financially well-off. They have detailed experience and save you time by being precise and accurate when it comes to reporting, doing the finances for you (instead of you doing everything yourself), and creating a budget/ plan to put you in the best financial state. In our previous monthly blogs, we cover the differences between CPAs, accountants, and bookkeepers (Accountants vs. CPAs vs. Bookkeepers) more in depth and how to find the right accountant (Accountant Lingo & Finding the Right Accountant). Additionally, don’t shy away from receiving coaching from other successful business owners in your industry. In a study from the Small Firms Economic Development Initiative, 70% of small businesses that received mentorship from experienced business owners survive their first year in comparison to 35% those who do not receive the same type of mentorship.

When others help you in your business, it grants you more time for yourself. Frequently, as an independent business owner, free time is seen as more time to generate more sales. While this is not necessarily false, it is imperative to take time for yourself outside of work. A common quote in the self-care world is, “You can’t pour from an empty cup,” and this means that you can’t take care of everyone else (everything else) unless you take care of yourself first. Additional time for yourself doesn’t have to be staying at home watching TV/playing games all day, it could also look like discovering new hobbies outside of work which could, in turn, expand your network even further. When you are well rested and have a good work-life balance, it, naturally, makes you happier. Happiness is Essential in Work because it motivates you, makes others see you as a better leader, and has a direct effect on employee health and productivity.

Business Success has many Factors

The world is ever-changing and this includes your business as well. Take care to always adapt to new employee & customer feedback and keep up with new trends in your industry. A successful business is created from a culmination of many different factors but by being well-prepared and adaptable to the world around you, you can create a successful business!