This year-end checklist for small businesses and the self-employed should help you get your income tax in order and get your business planning for the accounting year ahead off to a good start.

1) Get your financial books in order.

For some small businesses and self-employed people, this is really difficult while for others it’s a breeze. But whether you’re self-employed with a glove box full of receipts that haven’t even been entered yet or a small business person who has a bookkeeper, you have to get this step done before you can do anything else.

So get the help you need and get on with it. Hire a bookkeeper and/or accountant (I can recommend a great one!) if you need to. Read last month’s blog about tips on how to find a good accountant

2) Determine your position.

The next step in your small business year-end checklist is to figure out where your business is now. There are three areas you need to examine:

  1. a) Finances – Examine your financial documents.

First, you need to prepare (or have prepared for you) the standard three business financial documents that will be the basis of your decisions.

Your Balance Sheet is a summary of how your business is doing financially at a particular point in time. It shows all your business’s assets, liabilities and equity.

The Income Statement lets you see at a glance whether or not your business is profitable at a particular point in time by itemising your revenue and expenses, resulting in a profit or loss.

The Cash Flow Statement reconciles your opening cash with your closing cash for a particular period, showing you where the money has gone. To prepare a simple cash flow statement, for a particular time (such as the year just past), list and summarise your business’s cash flow inflows and outflows for each of these three areas:

  • Cash flow from operating activities – such as revenues and expenses
  • Cash flow from investing activities – such assets bought and sold
  • Cash flow from financial activities – such as loans and repayments

This will show you the net increase or decrease in your businesses cash flow over the period of time you’re looking at and show you at a glance where the money went.

Once you’ve examined your balance sheet, income statement and cash flow statement, dig a little deeper by checking your business’s current ratio, total debt ratio and profit margin. It won’t take long with your balance sheet in front of you.

  1. b) Goals – Evaluate your goals from last year.

Now that you know where your business is, it’s time to take a look at how it got here.

Pull out your business plan and any other planning documents such as last year’s action plan and review your goals for last year.

Did your business accomplish what you set out to do? Why or why not? Make some notes on your thoughts about the successful accomplishment of your goals (or lack of it). These will be handy when you do your business planning for the current year (step 3 of this small business plan checklist).

  1. c) Taxes – Evaluate your current tax strategies.

Which of these tax strategies have you used and how well did they work for you? Investigate different tax strategies that you haven’t used, such as changing your business structure to a limited company.

Talk to a professional such as an accountant or tax solicitor to get advice about which tax strategies would be best for your personal and business circumstances.

3) Plan for the coming year.

All right. You’ve done all the groundwork and you’re ready to do some business planning. That means that you are going to:

  • Set next year’s goals.
  • Prepare an action plan or plans.
  • Start implementing your action plans.

4) Get your tax documents prepared.

You can turn over the required documents to an accountant – we offer free consultations and charge as little as £100 to prepare and file your income tax returns!!

We can tell you what records we need in order to complete your return so don’t panic if you’re in any doubt!

That’s It! You’re Done!

You know the cliché; businesses that fail to plan plan to fail. We all know how important business planning is, but it’s easy to put off when you’re bogged down with daily events. Hopefully, this year-end checklist has inspired you to get to it and made your business planning easier.

For further advice, a free consultation or to find out how to get your tax return completed and filed for just £100 contact us on 07970 298253 or alternatively email us by filling in your contact details here,  and we’ll get right back to you.