Navigating End-of-Year Auditing: How to Drive a Smooth Transition into 2024
December 15, 2023
The end of the year is usually crunch time for entrepreneurs. It often feels like you’re juggling too much — daily business tasks on one hand, critically important detailed audits on the other, all while the clock’s racing.
While end-of-year auditing often feels like a much-resented chore, it’s paramount to the health and well-being of your business.
With a clear, step-by-step approach, you’ll sail through your auditing smoothly, laying a rock-solid foundation for the upcoming year. And yes, you can leave the stress behind! Here’s how.
Streamline Your Business Expenses
Tracking business overhead can be overwhelming, and the main challenge is maintaining accuracy amid the countless expenses that come with running a business.
Whether it’s office supplies, equipment or operational necessities, keeping a tight grip on where your money is going is essential to maintain financial control and make informed decisions.
If Amazon is a big part of your operating expenses, give Amazon Business a try. It comes packed with helpful insights on detailed spending summaries and streamlined expense management tools. Plus, you can enroll in recurring delivery and earn a 5% discount on eligible reorders, saving you time and money that might have otherwise been left on the table.
Otherwise, in the whirlwind of “Amazon-ing” everything from A to Z, it’s vital to audit regularly. Ensure every delivery is accounted for and properly expensed. This sharp-eyed approach helps in catching overlooked, undelivered items and guarantees your financial records are detailed and error-free.
Prepare Early for Tax Season
Just because the tax season isn’t knocking at your door yet doesn’t mean you can’t start rolling out the welcome mat. As an entrepreneur, you know the value of being one step ahead.
Shifting gears from the daily grind to preparing the groundwork for tax season now can turn what’s often a scramble into a smooth stride.
Here’s how to get a jump on things:
- Organizing Documentation for 1099s: Compile a list of contractors and vendors who you paid
more than $600 this year. Ensure you have their latest contact and tax information for accurate
1099-MISC or 1099-NEC form reporting.
- Preparing for W2s: Gather and verify up-to-date information on employees’ earnings,
withholdings and personal details. Remind staff to report any changes in personal information
like address or legal name for accurate W2 form processing.
- Maximize Charitable Contributions: Donating to 501(c)(3) organizations lets you claim the
maximum allowable tax deduction while also doing good. It’s a win-win for you and your
- Plan for Major Purchases: If you’re eyeing big-ticket items for your business, buying them
before year-end can be a smart strategy. These purchases can often be written off, potentially
reducing your taxable income.
Refine Benefits Renewals & Adjustments
Facing those rising insurance premiums? Tackle them head-on by diving into why they’re increasing — is it market trends, or are your team’s needs changing? Understanding these dynamics is your first step toward making informed adjustments.
Take a close look at your current benefits package. Are there perks that aren’t really being utilized by your team? Consider reshaping them. Also, consider if there are any gaps in benefits, like wellness programs that could be valuable to your staff. Adjusting deductibles or out-of-pocket limits can be another avenue to explore. Even small tweaks in these areas can lead to significant savings.
The goal is to strike a balance where your benefits remain attractive to your team but are also aligned with your business’s financial health.
Assess End-of-Year Bonuses with Balance
Assessing year-end bonuses is like walking a tightrope. On one side, there’s the desire to reward your team’s hard work and dedication; on the other, the need to keep an eye on your business’s financial health. This delicate balance is crucial.
Here’s what to keep in mind:
- Holiday Bonuses: Take a close look at this year’s financial performance. How did it stack up
against last year? Identify the standout performers in your team. Align their rewards with your
financial reality and company norms.
- Mileage Reimbursements: Gather all the logs of business travel from your team. Apply either
the IRS standard mileage rates or your company’s established rate to these records.
- PTO Payouts: Review unused PTO balances and check your policy. Are you rolling over, paying
out or implementing a use-it-or-lose-it approach, as some Arizona companies do? Do the math
as per your policy to clear the decks for the new year, and think about whether updating your
PTO model, possibly to an unlimited plan to avoid payouts, aligns with your company’s values
and what your employees expect.
It’s all about making thoughtful, balanced decisions that honor your team’s contributions while maintaining your business’s financial wellbeing.
Forecast and Budget for the New Year
Stepping into the new year, it’s crucial to have your financial roadmap ready. It’s time for your team to align on income goals and service targets, understanding how these play into your bottom line.
Analyze past sales and current market trends to chart a course for the upcoming year. Efficient forecasting hinges on the latest data and zeroes on key revenue and expense items. It’s the tool that empowers you to reallocate resources wisely and helps your team make sharp, data-backed decisions.
Think of budgeting as sketching out your business’s financial journey. It’s about allocating funds thoughtfully, balancing your cash flow with planned spending. Now’s your chance to examine recurring expenses. Where can you economize, and where’s more investment needed?
Generally speaking, your budget should clearly outline:
- Projected Revenue: Break down the types, values and timings.
- Fixed Costs: These are your constants — salaries, rent, utilities.
- Variable Costs: The fluctuators like supplies, travel expenses and maintenance.
Engage Your Team in Goal Setting
Setting the right goals is like unlocking a door to your team’s potential. Without them, progress can be as random as finding a needle in a haystack.
Gather your team for a focused goal-setting session. The aim here is to be ambitious, yet practical. Think more “marathon” than “sprint,” setting goals that stretch your team’s abilities without overwhelming them.
Consistent check-ins are key. These brief touchpoints will keep everyone aligned and moving forward. By the end of the year, you’ll likely see just how far these achievable goals have taken your team.
Conduct a Thorough Subscription Audit
In today’s digital world, businesses are often juggling a myriad of subscriptions and recurring charges. Everything from cloud storage to marketing tools forms part of the modern business toolkit. But beware, without careful management, these subscriptions can silently eat into your budget.
- Audit your Subscriptions: Start by gathering all your financial statements — bank, credit card, digital wallets — you name it. List out each subscription, noting costs, renewal dates and any other key details.
- Assessing Value: Now, track how much you actually use each service. Is that fancy project management tool really getting enough use? Weigh the cost against the practical benefits you’re reaping.
- Cutting the Excess: If a service isn’t pulling its weight, it might be time to say goodbye. Not using all the bells and whistles of a premium plan? Downgrading can be just as effective. Each dollar you save here is a dollar you can invest in areas that truly drive your business forward.
Set the Stage for 2024 Success with eeCPA
In the exhilarating world of entrepreneurship, every moment counts. You’re relentlessly forging ahead, innovating and shaping your legacy. But amid this drive, managing your finances with precision is critical — it’s the backbone that supports your vision.
At eeCPA, we understand the urgency that fuels your entrepreneurial spirit. Having built and grown businesses ourselves, we’re dedicated to carrying the financial weight so you can focus on scaling new heights. Explore our solutions tailored to meet the needs of entrepreneurs who do things differently. Contact eeCPA to get started.