Q4 is just around the corner and that means that business owners need to turn their focus to how to prepare for end of year reporting and tax processes as well as prepare for new systems implementations being considered. Christina Griggs, CEO of Gemsbok Consulting, offers her advice for the top three things that businesses should be thinking about now.
1. Tax planning
Now is the time to create a forecast of the year’s revenues and expenses so that you can adjust estimated tax payments accordingly. It makes no sense to let the government function as your bank, holding onto your overpayments until next year but conversely, you want to avoid the penalties that come with underpayments. Updating forecasting will help you plan well.
2. Prep for payroll taxes
- It’s time to review payroll with an eye to ensuring that 941 reports match payroll summaries, saving headaches later.
- You want to review income statement and balance sheets to catch errors this side of January.
- Also, be sure to look over any vendors that you paid above $600 to for service, rent or legal fees. You need to have their W-9s on file so that running the required 1099 forms doesn’t hold you up in January.
3. Systems changes
If you have been contemplating a switch to a new payroll, accounting or HR platform, this is the time to start making your moves. Each of these require several months of planning and thoughtful steps to implementations so they don’t crash your whole way of doing things and, thereby, frustrate your employees.
This is also the time to tweak accounting structures to make sure you get the reporting that you need to make the best decisions for your business, moving forward.
4 Biggest Mistakes
In her experience, Christina says that the biggest mistakes that business owners make at yearend are:
- Not creating liability accounts for credit cards to track any unpaid balance.
- Not recording interest on loans in the books.
- Not making the proper distinction between employees and contractors for payroll. State investigations around this are on the uptick in Q4 and the penalties can be stiff if your State declares your business non-compliant.
- Not properly reporting owner benefits as taxable income on W-2s.
A little work in Q4 goes a long way in smoothing out the rough patches that Q1 can bring. If the thought of any or all of the above leaves you feeling overwhelmed and not sure where to start, we can help! Gemsbok Consulting offers consultations on Q4 preparations, at no cost. Contact us today to help you finish 2021 well.
