For many businesses, the approach of the end of the year can mean one of two things — working round the clock to get everything done before December 31 or making resolutions to operate more efficiently in the new year. Fortunately, the following year-end budgeting checklist offers a smart way to transform those resolutions into actionable items right now. And by doing so, you can both close out this year and start the new year with confidence.
End-of-Year Billing Checklist
While not all of the following year-end billing tips apply to every business, they’ll help most companies start the new year in much better shape.
- Do a final collections drive: The end of the year comes quickly for all businesses, which is why contacting any of your slow-paying and outstanding accounts as early as possible with a firm — but polite — reminder can be helpful. Remember to make it easy for them to pay — provide clear directions that pertain directly to the payment methods they use, such as a credit card, check, e-check or ACH.
- Reconcile payments: Check for inactive accounts and send the owners a last notification before closing them. Also, look for chargebacks, rejected charges, transactions that haven’t been processed and expiring credit cards that could impact accounts with recurring billing.
- Reconcile your credit cards and bank accounts: Check that your financial reports and year-end statements correspond with your credit card and bank accounts, as well as with your ledger balance.
- Check W-9s: If you’ve used vendors or independent contractors in the past 12 months, you’ll have to collect W-9 forms for each one to whom you’ve paid $600 or more. A W-9 is a request for the vendors’ taxpayer identification number, which you need in order to issue and file 1099 forms. You can find more information about the W-9 on the IRS website.
- Collect your receipts: Before claiming expenses, you need to organize your receipts. Categorize them by month and type of expense, and make sure that both paper and electronic receipts are synced with your bank account or credit card.
- Review processes for possible automation: Manual processes are time-consuming and prone to human error. Identify processes — such as accounts payable, document management and financial reporting — that can be automated. It’s also helpful to note that at Vanguard, we provide a range of easy-to-implement, secure solutions that can help streamline your billing year-round, ensuring you pay only legitimate invoices and making your employees more productive.
- Plan ahead for the upcoming year: Preparing for the new year will help you keep your books organized, which will make it easier to manage your business’s finances. Once you’ve implemented automation for processes, you can streamline your workflow so that you close out the books properly at the end of each month. Issue any W-9s early on in the year so you’re not waiting for vendors to respond at the last moment. Use a receipt management system that keeps all receipts — both paper and e-receipts — correctly categorized. Also, talk to your bookkeeper about any improvements you can make to further streamline your bookkeeping process.
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