Client Work Matters: Year-End Accounting Essentials

As the year comes to an end, it's crucial to make the most of the remaining days to set the tone for 2024.?

Whether you have a dedicated accounting department or a sole team member handling bookkeeping, there are several important factors they shouldn’t overlook when wrapping up the fiscal year for your service business. This week, we will be discussing the five essential factors to take into consideration before 2023 ends.

1. Create a system for recording expenses. Scattered receipts or endless photos saved on various phones won’t suffice when it’s time to reconcile accounts. Instead, build an efficient expense submission workflow that applies to your entire team. You may want to use an app that connects with your accounting software.
2. Send invoice reminders. When you’re getting close to the end of the year, you need every outstanding invoice paid. Set up automated email reminders to go out to clients whose payments are overdue. It also helps to write thorough invoices that clients understand and will be more apt to pay right away.
3. Anticipate and pay any bills that overlap with year-end dates. For the same reason you want your clients to be paid up, it’s critical to make sure you don’t have any unpaid bills floating around. Your accounting team should check that every vendor, consultant or software account will be current at the time of a fiscal closeout. That means reviewing due dates two to three months in advance to ensure you’ll have the cash flow to satisfy any debts.
4. Consider additional labor costs that could arise before the end of the year. Will you be issuing any raises or bonuses to current employees or onboarding any new hires before your year ends? What’s changing next year? These items are easy to overlook, although labor costs account for up to 70% of business costs. Be sure your accounting team is aware of upcoming changes to your core employee pay and benefits.
5. Keep a centralized tally of business assets. Assets are just as important as expenses when it comes to the overall financial health of your business, but many people forget to keep track of them until a tax deadline pops up. Depending on your country, state and industry, tax laws regarding assets could vary. You won’t want to complicate your tax return process any further by waiting until the last minute to determine what counts as an asset this fiscal year.

As obvious as this advice may seem, it’s tempting to put off the accounting fundamentals until your year is coming to a close and you’re scrambling to gather all the paperwork your team needs. Thinking about the monotonous financial tasks now and finding ways to make them more efficient can decrease the amount of time your employees spend on non-billable work.

Looking for additional ways to prepare for a successful 2024? Check out 10 Easy Ways To Inspire Your Team for a Productive New Year.