The end of the year is upon us, and it is time to get organized with your accounting records. If you have not done so already, I would highly recommend getting on a robust accounting system for your business. Check out Outright, Freshbooks, Less Accounting or whatever works best for you.
It’s not an exhaustive list but a good guide to ensure that you are ready for the end the year and tax time. Some of the tips I got from the National Association of Certified Public Bookkeepers (NACPB).
- Enter final transactions for the year. Pay bills, people and other expenses.
- Enter ALL cash receipts for business expenses (taxis, business meals,subway, train)
- Reconcile all your accounts and enter any missing transactions.
- Work on reducing receivables (Follow up with clients/customers to get paid)
- Write-off bad debt if necessary, but work on getting paid by customers/clients first.
- Make IRA or 401K contributions and donations to charity to reduce taxable income
- Make all asset depreciation entries (only applicable for equipment that you had put on a depreciation schedule)
Organize: Make Life Easier on Your CPA and Understand What Happened During The Year
- Collect all bank statements and business credit card statements for the year.
- Make sure you have check register.
- Inquire from your CPA as to what reports, form and any other documentation are needed.
- Ask if year-end reports should be on a cash basis or accrual basis
- Back up the accounting file in case of any data loss
- Send a copy of your Income Statement and Balance Sheet to your accountant at the end year to get an idea what your taxes will be in March 15 (quarterly) and/or April 15 (personal income tax deadline).
- Order 1099-MISC forms (Independent Contractors) and W-2 forms (Payroll Employees) early. The forms are much cheaper if buy at Staples then via Quickbooks.
- Get Independent Contractors current mailing address and SSN.
- Calculate the total payments made to them for the year.
- You can file 1099s online. The deadline for when are sent to independent contractors is January 31.
What is your money resolution for 2010? Mine is to make more and spend less.
Lifetuner invites you to chat on Twitter about money resolutions for a great 2010. On Wednesday, December 16, we’ll bring together several personal finance experts on Twitter to provide tips for setting and keeping money goals and to answer your financial questions. Get ready for a great money year in 2010 with a Twitter chat on Money Resolutions Wednesday, December 16 at 1pm ET/ 10am PT Follow the hashtag #ltchat and @lifetuner on Twitter.
Today The Supreme Court will listen to a challenge to the Sarbanes-Oxley Act of 2002, the centerpiece of the government’s response to the watershed accounting scandals at Enron and Worldcom. There’s a chance that Sarbanes Oxley will be repealed, and if so it will confirmed what I thought-that Sarbanes Oxley (SOX) compliance is a waste of time and money. In February of 2004, I worked at Protiviti, a consulting firm that was created by former Arthur Andersen partners. I worked as risk management consultant and most of the work was Sarbanes Oxley compliance. Before working at Protiviti, I previously worked as an internal auditor for Deloitte & Touche and KPMG. SOX compliance testwork and narrative is similar to internal audit’s, but there was no one standard. Plus, the time the consulting team which included me “camped out” at a corporate headquarters for months documenting everything which seemed to mean nothing. It was frustrating work, and I am so glad I quit.
There’s an opinion piece in the Wall Street Journal that refers to a study:
In 2008, the SEC’s Office of Economic Analysis launched a survey of public companies to judge the results, and it recently posted the findings on the SEC Web site, after collecting data from thousands of corporations.
Section 404 is still consuming more than $2.3 million each year in direct compliance costs at the average company. The SEC’s survey shows the long-term burden on small companies is more than seven times that imposed on large firms relative to their assets. Are the internal controls audits helpful? Among companies of all sizes, only 19% say that the benefits of Section 404 outweigh the costs. More respondents say that it has reduced the efficiency of their operations than say it has improved them. More say that Section 404 has negatively affected the timeliness of their financial reporting than say it has enhanced it.
Square has just launched, and it may cause a revolution for online payments. One of the founders of Square is Jack Dorsey who you may have heard of because he is one the guys who started Twitter. Square allows for you to use your iPhone for online payments, email receipts, donate money to charity and enable reward programs for frequent customers. I can wait to see how Square could work with online retailers and make mobile payments super easy.
On Wednesday, LearnVest had a fun Launch+Holiday Party at The Limited’s at their Soho Pop-up store. What is LearnVest? LearnVest is a personal finance site for women that provides interactive content that walks women step-by-step through key financial decisions.