You might wonder why there are so many extra tasks at year-end. While the government requires much of the work, there is clean-up work and adjustments that need to be done to make the books accurate. It’s not always cost-effective to perform all of these updates monthly, so you’re actually saving money by doing some of them at year-end.

Here are just some of the items that are performed at year-end.

Tax-related:

  • If you have payroll, employees need to be sent their W-2s, and the federal and state government need a copy of the W-2s with a W-3 transmittal.
  • For employees, you must also have an up-to-date W-4 signed by them.
  • For employers, your federal unemployment 940 return is due.
  • If you have contractors, they need to be sent their 1099s, and the IRS needs the 1099s and the 1096 transmittal.
  • For contractors, you must also have an up-to-date W-9 form from them. You may also need to request an insurance certificate, or you may get a surprise at your workers compensation audit.
  • For vendors that claim exemption from sales tax, you’ll need to be sure you have an exemption certificate in your files from them.
  • If you pay sales tax annually, your return and payment are due.
  • Your personal federal, state, and local income tax and returns are due in the spring, and they can be extended until later in the year.
  • Depending on the type of entity your business is organized as, you may have franchise, federal and state tax returns to file. This deadline comes up sooner than the individual tax return due date.

Books-related:

  • Just about every asset on your balance sheet needs to be verified in some way or other:
    • Petty cash accounts need to be reconciled and reimbursed as of year-end
    • Bank accounts need to be reconciled with the bank statements. This includes PayPal.
    • Accounts receivable balances and all other receivables need to be tied to each customer and any amounts determined to be uncollectible need to be written off.
    • A physical inventory count needs to be taken and the inventory account should be adjusted accordingly.
    • Fixed assets need to be reconciled to their fixed assets ledger and depreciation should be properly recorded.
    • Goodwill accounts need to be checked and amortization adjusted.
    • Accruals, deposits, deferred accounts and all other asset accounts need to be adjusted if necessary.
  • Liabilities and equity need to be adjusted too:
    • Accounts payable balances and all other payables need to be tied to each vendor.
    • Liabilities that haven’t been recorded need to be added to the books.
    • Loans need to tie to lender statements, and interest paid on loans needs to be properly expensed.
    • The Equity accounts need to be checked and tied out to prior year balances.
  • Corrections and adjustments need to be made:
    • Any misclassifications and corrections need to be made on the books with adjusting journal entries or other classification tools.
    • If the client is a cash-basis taxpayer, a reversing journal entry needs to be made to get the correct tax numbers.
  • A clean set of reports can now be run and used.

Documents-related:

  • This is a good time to file and store your receipts in case you are ever asked for them. For long-term storage, thermal receipts should be copied or scanned in before the ink fades.

If you’re wondering why we’re so busy this time of year, it’s all of the extra work we have to do over and above the normal monthly load. If you have questions about any of this, just ask anytime!

Did you know that you can add apps to help increase the functionality of your core accounting system? The process will save you time and frustration. It is because every business is different that you may—and likely will—need these add-on features that aren’t already included in the accounting system you currently use. That’s where the apps come in: They provide a deeper functionality in the areas you need them. Take a look below at some examples we’ve put together.

  1. Payroll

Payroll apps help to simplify how you pay your employees. These payroll apps were created to help you implement an easy and automated method of managing payroll and all things HR-related.

Popular payroll options include Intuit’s many options, Gusto, ADP, OnPay, and Patriot.  Explore the different features of each app and find which one works best for you and your needs.

  1. Time Tracking

The best and most accurate way to keep track of an employee’s time is with an app. A wide range of apps can make not only tracking but scheduling your employees’ time simple, too. These apps include:

  • ClockShark
  • BigTime
  • Time Tracker
  • TSheets
  • And more!

Again, each app will offer different features. For example, most have timers, but only one might offer geofencing, so find the one that’s best for your business. Regardless of which one you choose to use, though, you will quickly discover how much time and energy you save without having to do time tracking manually.

  1. Inventory

Need more functionality to better manage your inventory? If you run an ecommerce, retail, or wholesale operation, you may need an inventory app to give you more features. Back order functions, drop ship handling, and recall functionality may be required depending on what you sell.  Here are some popular apps for inventory:

  • SOS Inventory
  • BigCommerce
  • Unleashed

There are also many ecommerce apps in this space: WooCommerce and Shopify, to name a few.

  1. Cash Flow

Dozens of apps exist to help you manage your cash flow as well as get funded:

  • CashFlowTool
  • Cash Flow Frog
  • PayPie
  • Chata.ai
  • FUndbox
  • Blue Vine
  • Fundera
  • And too many to list

Managing your cash and debt are important areas and ones that are easy to find to help you get quicker answers to your questions.

Now that it’s 2020, try working smarter, not harder. Add-on features can help! Remember, the examples listed above are just a few apps currently available. Determine what you need for your company to make better decisions, and then look around for the perfect app.

And, if we can help you implement your ideas faster, feel free to reach out to us anytime.

In his book, The Rebel Rules: Daring to Be Yourself in Business, author Chip Conley describes what investors look for in a management team when considering providing startup money to new businesses. He says your management team should consist of a “brain trust that includes a passionate visionary, a ‘get-your-hands-dirty’ operator, and a responsible, finance-minded executive.”

Even if you’re never going to seek venture capital money to fund your business, this tidbit of advice makes a great strategy question to consider for your business, especially if you are an entrepreneur. Do you have these three roles in your company?

Passionate Visionary

The passionate visionary is a creative idea person. She has the technical knowledge that supports the service or product that will be created and offered. She sees the market need and just how to sell and position the product so that clients or consumers will want the offering.

The visionary often has more ideas than budget. The finance role can evaluate the profitability of the visionary’s ideas and prioritize the projects. The operator can execute the visionary’s ideas.

The visionary provides strategic direction for the company and keeps the market offerings fresh.

If your business is missing a visionary, you might also struggle to keep your practice full as often (but not always); the sales function could fall to the visionary. You might also find yourself getting stagnant with your service offerings and falling behind the marketplace.

The fix for a missing visionary is to develop a sales and marketing team and/or a research and development team that can serve these functions.

“Roll-up-your-sleeves” Operator

The operator is an action person who can execute. She gets things done. She can find and hire the right team. She is a systems builder who can develop the systems, job descriptions, procedures, and processes that makes the company unique.

The operator takes the visionary’s ideas and makes them happen. She needs the visionary’s ideas because she would rather take someone else’s ideas and work with them than create her own. She also needs the support of the finance executive to stay on budget and to focus on one project at a time or avoid hiring too many people.

A business without a good operator never gets the product to market and may also constantly be short of team members.

Responsible, Finance-minded Executive

The finance expert helps to make the dollars work for the company. She can tell us how much we need to sell and how much we can spend. She can also provide capital sources for the company via investors or loans.

The finance executive loves numbers and can help to make sure the company’s operations are profitable. She’ll work closely with the operator to make sure that the right number of people are hired at the right salary levels. She’ll work with the visionary to plan and budget for new sources of revenue and new product lines.

Without a finance executive, a company often spends more than they bring in and may not have a viable profit plan. They may also run out of cash which can cause problems with creditors and investors.

This is the role we can not only help you fill, but also help you build your financial literacy to the level that you need for the stage your company is in now and for the future.

Your Business Success Trinity

As you were reading, which role are you? Which role jumped out at you that might need shoring up in your business? You might be strong in one area and need to outsource another while keeping a strategic eye on things overall.

Take a look at each of these roles and objectively assess your business. How are all three roles being served in your company? Which ones need more development in order for your business to grow?

Getting clear on your company’s roles can very well take you to the next level of success.

Which trends impact your business the most? Which ones speak to you? Feel free to reach out to discuss any of these ideas with us.

As we welcome in a new year (and maybe a new decade depending on how you count them), it’s a perfect time to reflect on the trends that will impact us and our businesses. Here’s a list for your consideration and reflection.

Trend #1: Sustainability

Concern for the environment has made the list of many companies’ core values. The way businesses are run can have a huge impact on the environment. While we hear a lot of stories about large companies impacting sustainability, we can also do our part as small businesses.  In the accounting profession, many firms have gone paperless, transitioning from staplers, paper clips, and filing cabinets to digital storage which greatly reduces their footprint.

Trend #2: The Gig Economy

Young workers often have multiple jobs instead of the 9 to 5 jobs of their parents. This means there is more flexibility than ever before when it comes to hiring and retaining young workers. They can be employees, contractors, outsourced solutions, remote, local, part-time, full time, temporary, or permanent.  Sub-trends in this area include more virtual workers and many more opportunities for veterans.

Trend #3: AI – Artificial Intelligence

This trend is impacting the accounting profession in a big way via smart data entry, smart document fetching, and even smart bookkeeping. Marketing has also been impacted in a big way through online ads, customer service solutions, and marketing technology. In email, Google is finishing our sentences for us, and chat and other technologies are having fairly effective conversations via bots.

Trend #4: Stories

Storytelling is huge everywhere. People want to know:

  • The story behind your business and why you do what you do
  • The stories about your customers and the experience they have with you and your services
  • The stories from your employers and how it is to work at your organization

Digital communication has moved from text to graphics to video as bandwidth improves. Video makes stories even easier to share. Smart companies will leverage both stories and video going forward to get their message out.

Trend #5: Diversity Expanded

The conversation is no longer about race, gender, and even sexual preference. It’s now about authenticity and being the same person at work and at home. No one is “normal.” But it takes courage to reveal our differences, especially if they are outside the “standard.” Your courage is more likely to be honored in 2020 than it has in prior years.

Trend #6: A WOW Customer Experience

We’ve moved way past the time of “infotainment,” yet the concept is parallel. As businesses, the challenge is how we can deliver an entertaining, positive, and memorable experience while producing the outcomes the client desires.

Trends #7:  Drones

So far, drones have made appearances in photography, special effects at conferences, as toys, in movies, and of course, in war. I see them in use for safety reasons, going where people shouldn’t or can’t. They will become more pervasive in 2020 and there will be more rules, protocols, and court cases on their use.

Trend #8: User Interface

The move from desktop to mobile is nearly complete, with only the laggard portion of the population remaining. The move to voice is still a work in progress, and it will steadily continue to gain traction in 2020.

Trend #9: Actionable Analytics

Capturing information digitally gives businesses a huge amount of data to utilize but small businesses have barely scratched the surface of this profitable information. It’s time they started catching up, and that’s something our firm can help you with.

Trend #10: Pace of Transformation

New business models in companies like Tesla, Uber, Google, and Facebook will continue to show up at a rapid rate. The business that’s most nimble will be the one that changes the game or at least stays in it without folding.

Which trends impact your business the most? Which ones speak to you? Feel free to reach out to discuss any of these ideas with us.

If your eyes glaze over when you’re presented with financial statements for your business, you’re not alone. Many entrepreneurs benefit greatly when they can see their financial results in graphical and chart formats. Fathom is the perfect tool to help your numbers come alive so they can become meaningful for you.

Fathom is a company based in Brisbane, Queensland, Australia and founded in 2011. The product is also named Fathom and is a cloud-based software application that crunches accounting data and provides multiple views that make analysis easy. In accounting terms, we call this type of software by many names: Financial Dashboard; KPI software, where KPI stands for key performance indicators which are metrics that help you measure your business results; and Business Intelligence (BI) software.

Fathom can present your accounting data in multiple insightful views:

  • KPIs – Popular KPIs are pre-loaded, plus you can create and calculate your own. Fathom handles financial KPIs like the current ratio or debt-to-equity ratio, and you can also enter non-financial data such as number of employees and customer satisfaction scores.
  • KPI explorer – This display takes on a wheel shape where green is good and red indicates room for improvement.
  • Profitability – This line graph shows your business’s breakeven point.
  • Cash flow – This bar graph shows in red and green your cash balance fluctuations.
  • Trend – This line graph allows you to see at a glance the direction account balances are moving over time.
  • Goalseek – This chart allows you to perform what-if analysis, set goals and measure your progress.

You can also generate predefined or custom reports in Fathom. The reports can be scheduled as well as exported to Excel.

Fathom does require a setup process. It integrates with QuickBooks Online, QuickBooks Desktop, Xero, and MYOB (which is popular in Australia). It’s included in the Advanced version of QuickBooks Online. The steps to set up Fathom include:

  1. Updating the data, which is mostly done through integration setup
  2. Adding your company profile
  3. Mapping Fathom to your Chart of Accounts, which is a very common setup step
  4. Selecting your KPIs, which requires some strategy work on your part
  5. Setting targets
  6. Enabling alerts if desired

There’s a lot to like about Fathom. If you feel like you’d like to start digging deeper into your business’s financial results to find opportunities for more growth and profit, then please contact us anytime.