10 Critical EOY Questions for Businesses

Many business owners find themselves juggling multiple tasks at the end of the year as they try to close out their financials. Asking the right end-of-year (EOY) questions can reduce stress, help clean up their books, and even uncover tax savings. Here are ten questions that will help business owners finish out the year strong.

1. Have I Included All Unpaid Bills?

Missing deductions can easily happen if unpaid bills are not properly recorded in accounts payable before year-end. Make sure to review all outstanding invoices and ensure they are accounted for to maximize your deductions.

2. Are My Bank Accounts Current?

Reconciling bank accounts is crucial to avoid missing deductions and to ensure accurate financial records. Take the time to verify all transactions and balances to catch any errors that could affect your financial statements.

3. Do I Have Any Old or Obsolete Inventory?

Writing off old or obsolete inventory can not only free up storage space but also eliminate unnecessary insurance costs. Additionally, it helps in presenting a more accurate financial picture for the year.

4. Should I Make Any Year-End Purchases?

Strategic year-end purchases can help reduce taxable income, especially for businesses expecting a profitable year. Consider investing in essential equipment or supplies that can be expensed in the current year.

5. Have I Included All Payroll Benefits for the Year?

Review payroll benefits like bonuses and retirement contributions to avoid complications with tax filings later on. Ensuring all payroll benefits are accounted for can also help maximize deductions.

6. Am I Missing Any Debt?

Verifying any debt or financed purchases is essential. Make sure these are properly recorded, including any deductible interest payments, to avoid missing out on deductions and to ensure accuracy in your financial reports.

7. Do I Have Any Errors in My General Ledger (GL) Accounts?

Reviewing the general ledger is crucial to spot errors that could lead to missed deductions or unrecorded transactions. A thorough GL review ensures the accuracy of your financial records and helps in preparing for tax season.

8. Can I Collect My Open Receivables?

Uncollectible receivables can be written off to clean up the books and avoid paying taxes on revenue you won't receive. Assess the likelihood of collection for outstanding invoices and make necessary adjustments.

9. Have I Recorded All Credit Card Purchases?

Capturing all credit card transactions ensures that all expenses are accounted for, avoiding missed deductions. Review all credit card statements and reconcile them with your financial records.

10. Did I Dispose of Any Assets?

Reviewing asset disposals or sales and considering the tax implications, including write-offs or income from sales, is important. Ensure that all asset transactions are accurately recorded to reflect true financial standing.

By asking these critical EOY questions, business owners can take action to optimize their financial health and prepare for the upcoming tax season. Conducting a thorough year-end review not only prevents future complications but also identifies potential savings. For personalized guidance, consider reaching out to our professional accounting firm. Empower yourself to close out the year with confidence!