As the year comes to an end, now is the time to make sure your books are in order. COVID-19 played a huge role in finances this year so it’s even more crucial to examine your books at the end of the year.
Here’s some ways to make end of year bookkeeping easier, despite all of the changes from the pandemic.
Prepping Accounts
There’s a large number of accountants and financial advisors working from home because of the pandemic. This could potentially cause hiccups while preparing accounts for the end of the year. Adjustments need to be made that allow the tax advisors and accountants to work together efficiently despite the potential separation.
If the inhouse financial team is unable to prepare the accounts in a timely manner, it might be time to outsource to an accountant!
COVID-19 Government Loans
If your business received a PPP loan over the course of the year, it’s time to make sure that documentation is readily available. The deadline for the loan forgiveness process is on December 31st, so be sure to have the documentation in order.
Consult a tax professional about the options available for a streamlined forgiveness application. If the loan was used for payroll, the business’s mortgage interest, rent or lease payments, the business will be eligible for loan forgiveness. That is why it is so crucial to have all of the PPP documentation in order and looked over by an accounting professional.
Questions to Ask for End of Year Financials
Is there a consistent channel of communication between the company and it’s financial team (either inhouse or outsourced)?
Has a financial expert examined the current year’s financials to see how COVID-19 impacted them and to prepare for changes in the new year?
If applicable, are all necessary documents for PPP loan forgiveness organized and ready to be submitted by December 31st?
Has the company considered outsourcing end of year financials to a team of tax and accounting experts to avoid possible delays?
Did COVID-19 result in terminations? If so, will termination fees qualify as a one-time arrangement or an ongoing benefit arrangement?
End of year financials play a large role in creating a financial plan for the new year. Now may be the perfect time to speak to a financial expert on the company's options. Consulting a tax and accounting professional could potentially save the company thousands of dollars in taxes in the new year!
Slow down, reach out to a professional and focus on keeping your documentation organized and easy to access.
Contact Fidelis Tax and Accounting and together we can create a smooth financial transition into the new year and help YOU win at business!
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