The holiday season is upon us once again. This could be an exciting yet challenging time for small business owners like you.
You get to reflect on the achievements you’ve made over the past year by celebrating with your team. At the same time, you also need to be prepared for possible added expenses. It’s a good thing that we’ve put together this guide to help you stay on top of your accounting.
A simple yet effective way to have a stress-free year-end closing is to start early. Start conducting inventory checks, preparing for your holiday promotions, and making sure your books are up to date if you have the time. Getting ahead of this now will better prepare you for when you start having an influx of customers. Also, you won’t have a hard time keeping up with your accounting processes.
Many companies hire external help because of the higher workload during this time of year. They often partner with outsourced professionals instead of adding permanent staff to save money.
When keeping your year-end financial records organized, consider working with outsourced bookkeepers or accountants from trusted companies like Peach BPO. Our skilled team of finance professionals undergo regular training and know the best practices that guarantee high-quality outputs on time.
The year is coming to a close, so make sure you follow up with customers who have yet to pay their invoices. This allows you to welcome 2023 with a clean slate. And remember that your small business’ cash flow highly depends on your profit. You need to have adequate cash on hand if you have added year-end expenses.
People tend to get more generous during the holidays. Surely, you set aside a budget for gifts to give to your employees, clients, and other stakeholders every year. Keep track of all your purchases, especially the ones that qualify as deductibles, as much as possible. In that way, you won’t have to panic once tax season comes.
Business events and parties can be a good and deductible expense, which is great if you plan a year-end celebration. But remember that the IRS is strict regarding tax write-off standards.
A party is only 100% deductible if you host it for your employees and their families, and the general public. Keep in mind that you, the business owner, cannot invite guests of your own. If the gathering includes a substantial business discussion, 50% of your expenses is deductible.
Overseeing your accounting can be twice as hard during the holidays. Start working on essential tasks as early as possible and make sure that you are monitoring all your purchases. The time you get to save will allow you to accommodate your customers better and prepare for the upcoming tax season.
Additionally, a new year signifies a fresh start, so reach out to customers with pending invoices. Doing this ensures you have a more stable cash flow to cover added expenses.
Be mindful of some tax-deductible holiday gifts and celebrations to accumulate a lower income tax and have a bigger budget for 2023.
If your small business is experiencing a higher volume of sales than usual, we suggest you look for external help as well. A budget-friendly choice would be outsourcing to service providers like Peach BPO. Once you work with us, you get expert assistance with your bookkeeping and accounting at rates much lower than hiring a full-time employee.