Susan Schneider, Nederland. Keeping your financials up to date is a year-round job for most small business owners and consumers. Not only does it help keep you organized, but it makes year-end financial planning much more stress-free. Most financial professionals recommend that you take a closer look at your personal and/or business financials toward the end of the year. A quick Q4 financial review can make tax planning easier, ensure that you have access to key documents and alleviate any surprises.
Here are four tips for getting fiscally prepared at this time of the year.
Review important financial documents
Taking stock of your income, investments and annual contributions is an important step at the end of each year. If you’re a small business owner, be sure to review your profit and loss statements (P&L) and balance sheet. If you carry inventory, have an accurate account of how much capital you have invested there. Consider making any significant purchases before year-end in the event it may be considered a depreciable asset.
Reconcile all accounts
Review credit card statements and bank accounts for your personal and/or business accounts. Reconcile all charges and payments and confirm that the statements match your records. If you notice any discrepancies, contact the appropriate financial institution, your bank or accountant to resolve the issue.
Check your credit score
At least once a year, it’s a good idea to check your credit report for any unusual activity, especially with identity theft on the rise. Set a reminder on your calendar for this task at the same time each year as part of your year-end financial planning process. Federal law requires each of the three credit reporting companies to provide consumers with a copy of a credit report once a year. Request a free copy from Equifax, Experian, TransUnion or at annualcreditreport.com.
Create a budget for the upcoming year
Using your financial documents from the current year will help you outline a budget for personal life and/or business and provide some direction for where to focus your expenditures for the coming year. If you are saving for a home improvement project or investment into your business, include this in your projections to help you plan in advance of any purchase.
Susan Schneider is the Nederland Banking Center Manager for Citywide Banks (formerly Centennial Bank and Trust). Reach her at 303.679.2244 or firstname.lastname@example.org. NMLS 935624. Member FDIC and Equal Housing Lender.