You might have to work, but you don’t have to work alone. At Stoke, we not only provide work space, but also offer resources to support our community of small business owners, entrepreneurs, creatives, and remote workers. If you’re part of the small business owner and solopreneur crowd, running your own business means being in control of and monitoring many moving parts, and one of the most important parts is managing your business finances. Without having a firm understanding of your business finances and keeping a consistent and critical eye on your revenue and expenses, you could find yourself in a difficult situation. Here’s an end-of-the-year financial checklist to work through to keep yourself and your business on track as we close out 2024.
Cover Your Bases
Do you know where your business stands financially compared to last year at this time? Take a look at your financial report (income statement, balance sheet, and cash flow statement) to understand your profits and losses. Using this information, you’ll be able to evaluate your business spending and strategize for the year ahead.
Know your cash flow to identify and evaluate trends throughout the year. Your cash flow statement gives you a clear view of how operating (revenue and expenses), investing (assets purchased and assets sold), and financial (loans and repayments) activities affect your cash balance.
Reconcile accounts receivable: collect funds for invoices that haven’t been paid. This bolsters the accuracy of your cash flow statement for the current year and allows you to have a fresh start. Though sending payment reminders isn’t the most exciting of tasks, doing so will help set you up for a strong start in 2025.
Prepare to Handle Taxes
Know and gather the forms and information you’ll need to file taxes. It’s also a good idea to evaluate what counts as tax deductions and credit opportunities. Typically, these deductions include general business expenses, legal services, advertising, rent and insurance, and employee salaries and benefits.
These are the most common tax forms for small business owners:
Schedule C: Reports income as a sole proprietor together with Form 1040.
Schedule K-1: Reports income if you’re an S corporation or partnership owner.
1099-NEC: Reports nonemployee compensation
1099-MISC: Reports rental income or gross proceeds.
Form 1120: Reports income if you’re a C corporation
1099-K: Reports card payments and third-party network transactions.
You’ll also want to gather income statements, expense receipts, and your tax returns from the last year to get ready to file.
Take Inventory
-of your tech stack, website, contacts, your physical products, count everything!
Update vendor information or confirm that it is correct. This should include contact information but also relationship notes (whether they are active or inactive, or if you want to negotiate different deals in the coming year).
Inventory includes intangible things like your business goals too. After looking at your cash flow and accounts receivable, take time to think back on what you set out to do this past year. Did you achieve your financial, management, and client goals? Create an action plan for new goals to help you achieve them.
Other intangible items include important data that you should back up on hard drives or other storage systems in case your current systems discontinue, glitch, or ultimately fail. Download files and reports that are crucial to your business. Write down information for your contacts as well. Not only will this be helpful in the event of technology issues, it will also be helpful in case of natural disasters or cyber threats. Log this task in your schedule for each quarter if you haven’t already.
Evaluate Your Operations
Celebrate your team (or just you!) for any major accomplishments this past year. Think about whether you might need to hire anyone in the coming year as well. When you evaluate your time and effort, you might budget for outsourcing work or bring work inhouse if needed. If there are bottlenecks in your processes, consider automation through tools like Zapier. Identify pain points that arose through the year in terms of issues or delays.
Experience your website as if you were a new user or as a returning client. Check links to make sure they take people where they need to go or allow them to download PDFs or other files. Make sure that people can contact you or submit forms correctly. Assess your website for its ROI and look at your site analytics.
Review your marketing efforts alongside reviewing your website - what’s working and what isn’t landing? Take a look at your key performance indicators to measure success and also determine if they’re still what you should be tracking for your business.
Get Ready for 2025
If you’re looking for help with handling your end-of-the-year finances, know that you don’t have to do this work alone! You can find assistance with bookkeeping, accounting, preparing taxes, and more, including the nitty gritty of tasks such as website audits and marketing efforts.