The start of a new year is a perfect time to build a roadmap for a successful year. Below is a financial checklist for Q1 that will help you set a clear path for the months ahead.

Q1 Checklist

1. Ensure you have a complete picture of your taxable income- Many business owners are surprised by their taxable income because certain transactions, like personal expenses, shareholder distributions, and loan principal payments, aren’t deductible for tax purposes. Principle payments made on capital assets which were financed aren’t deductible, though the interest is. To get a full picture of financial health, regularly review all reports from cloud accounting apps –-not just the Profit & Loss statement.
2. Organize and reconcile your business books- Review key financial documents like income statements, balance sheets and cash flow statements. Remember, only make corrections in the current year’s books, not prior years. It is important to reconcile bank accounts; review credit card statements and loan statements; address uncleared checks outstanding deposits and make sure all taxes are paid. This will set you up for success for filing season.
   
3. Start organizing your tax documents- Begin collecting key documents such as W-2s, 1099s, receipts, and expense records to streamline tax preparation and reduce stress before deadlines. It’s also important to review and update employee, vendor and tax records to make sure that employee and vendor information is accurate, ensure tax forms (e.g., W-4s, W-9s, 1099s) are up-to-date, and address any payroll or compliance changes.
   
4. Review your budget and cash flow- Take a look at your financial statements to examine your revenue, expenses and current assets and liabilities. Do you use a cloud-based accounting system? You can pull monthly and yearly reports to analyze. Remember, when setting a budget, it’s important to take account of what you already have, any hiring needs for the year, and new technology, real estate, and other purchases you might need to make in the coming months.
   
5. Update technology- Are your current tools maximizing efficiency and productivity? Is there opportunity to automate any of your processes? Investing in cloud-based accounting software can help automate repetitive tasks like data entry, expense reporting and payroll reporting.

These items provide a solid foundation for financial success, ensuring your records, planning, and compliance are in order for the year ahead. Wondering how you can improve your business’s finances? We can help.