An Accountant’s Year-End Checklist for the Childcare Business Owner
As the year draws to a close, a few important tasks may still need to be checked off your to-do list as a childcare business owner. In the following guide, the Honest Buck Accounting team has compiled an actionable year-end checklist for the small business owner. Read on to find out more.
Year-End Checklist from Your Accountant
Consider the following items as important tasks to complete before the end of the calendar year in order to close out 2022 and set yourself up well for the year ahead. These items are not meant to add to the overwhelm; rather, by tackling the following areas, you can be better prepared for a smooth transition into 2023.
Run Year-End Financial Reports
Running year-end financial reports will help you understand your business’s financial picture as the calendar year comes to a close. Essential year-end reports to run include your Income Statement or Profit & Loss Statement, your Balance Sheet, and your Statement of Cash Flows. If you have been keeping up with your financial reports on a monthly basis, running your year-end financial reports will be a breeze. The end of the year is a good time to review these documents together with your CPA. Along with running year-end financial reports, make sure you reconcile all bank accounts and credit card accounts.
Clean up Your Vendor Lists
Make sure your vendor information is current at year-end. Update contact information for your vendors, delete or archive vendors whom you no longer use, and take time to attach a vendor to every expense to make it easy to file 1099’s.
File Year-End Tax Documents
Even though this year’s business taxes aren’t due until mid-April, there are still some important tax forms you are required to file by the end of the calendar year:
Form W-2 – As the business owner, it is your responsibility to file Form W-2 for your employees to the Social Security Administration, reporting the wages they have been paid this year, as well as the taxes withheld from those wages.
Form 1096 – If your childcare business has worked with 1099 contractors this year, you will need to file Form 1096’s for each.
Form 941 – In order to account for taxes paid to programs including Social Security and Medicare, you will also need to file Form 941.
Form 940 – Form 940 is used to report business contributions to Federal Unemployment Tax (FUTA), which you pay out as a business owner for unemployment compensation.
Form 1095c – Another important form you will need to file if you provide health insurance for your employees; it is filed for each employee receiving coverage and can have implications for tax credits.
It’s important to remember that it’s your responsibility as the business owner to file the right forms on behalf of the right employees and contractors for your childcare business. Reach out to your accountant if you have questions about filing tax forms by the end of the calendar year.
Update Employee and Payroll Information
The end of the year is also a good time to update information relating to your childcare team members. Is your contact and payroll information for your employees up-to-date? Do you need to change or remove access to computer systems, financial programs, and other sensitive information?
Another area to consider for your childcare employees is raises and bonuses for next year. Now is the time to decide on raises and employee bonuses, so you can be sure to make the appropriate adjustments in your business budget to accommodate the changes for the new year. Reach out to your accountant for advice on employee raises and bonuses, as needed.
Identify Staffing and Outsourcing Needs
Take stock at the end of the year of where you stand with the needs of your business from a staffing perspective. Do you see yourself needing to hire an additional employee, or several, next year? Do you have business needs that can be outsourced to contractors? Either way, you will need to decide on and plan for these changes in the year ahead.
Identify Other Business Needs
In addition to your staffing needs, take time to assess other needs of your business for the upcoming year ahead. What do you need in terms of software upgrades, major equipment, renovations, or updates to your program or facility? Start to think about these big expenses now and talk with your accountant about your options for making capital improvement investments, as well as the tax and budget implications of your impending expenses.
Audit Your Business Website
It’s always a good idea to take inventory of your company website at the end of the year. How is everything working? Are your business hours, employee bios, contact information, and so on up to date? Are all the links working? Do you need to update any pictures? Who runs maintenance on your website? Can you check in with them to see if they have any suggestions or updates for you to consider? Remember, your website is the online face of your business, so make sure it (as well as your social media pages) is in great shape for the new year.
Back-up Your Digital Devices
Has it been a while since you have backed up your digital devices? Do it now before the end of the year! Even if your digital data is backed up regularly to a cloud service, remember to also to back up a hard copy as well. It’s better to do this more frequently than once a year, and it never hurts to get in the habit today.
We hope these practical items for your end-of-year to-do list help you close out the year well and begin the new year with organization, purpose, and ease.
Wishing you a Happy New Year, from all of us here at Honest Buck Accounting.
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