Let’s face it. Fall is slowly rolling into winter, Halloween has passed, and the store shelves are chalk full of Christmas décor. That really just means one thing – it’s nearly the holiday season.
Now, as a small business owner this may not be your fiscal year end, but it’s the end of the year nonetheless; and that is likely to have some implications for your business.
What does that mean for your small business? It’s time to prepare, now.
But, let’s first go over what exactly the end of the year means for most business and small businesses, because it may mean different things for different businesses.
Let’s say, for example, that you’re a small consumer goods retailer in Vancouver, B.C. If you’re approaching the year end, it means that you need to have plenty of inventory to support the onslaught of eCommerce and in-store orders that you’re likely about to receive.
The same would be the case for a café or restaurant owner in Victoria. Be ready for business, and lots of it.
For these primarily B2C businesses throughout Vancouver and B.C., the main focus at the end of the year is to make sure you have the inventory, staffing, cash flow, and strategies ready to sustain yourself during the holiday season.
It also means that you’re going to want to plan your spending and saving in different areas of your business accordingly.
What do we mean?
Settle up with vendors and suppliers, be ready to spend on marketing and year-end promotions, establish spending policies with employees, and get ready to account for promotions and sales that you have during the season.
In short, there’s a lot that’s going to be happening during the end of the year as you serve those sale-crazy shoppers.
Now, however, let’s look at this end of the year from a different perspective.
We’re talking about B2B small businesses and companies—again, primarily throughout the Vancouver area.
As a small business operating in the B2B market during the holidays (think, accountants, warehouses, marketers, and other professional services), the focus will be fairly similar—albeit with some slight changes.
Most small B2B companies aren’t going to be focusing on accounting for sales, and spending on various promotions for their storefronts.
Of course, they may decorate for their staff during the holidays, but that’s a different story altogether.
Rather, the holiday-season accounting focus for most B2B small businesses is going to be focused on reconciling their accounts, collecting on all receivables, managing payables, and financing, and making sure that their books are (mostly) settled during the holiday season.
The fact of the matter is that most businesses are going to be shutting down for the greater parts of the holiday season, and most consumers aren’t going to be as picky during this season (except, of course for those last-minute shoppers who are buying their Christmas Eve presents because “they get a better deal”).
In other words, the holiday season is a time where not as much work gets done that we usually see or would like to see in small business.
There’s Christmas parties, family dinners, outings with friends, and general holiday festivities that all happen throughout most of December and January (because let’s of course not forget about New Years!).
All this together means that most small businesses may not be as productive as possible during the holiday season.
Especially in big cities like Vancouver, there’s always something to do!
So, what does that mean for a business owner? And, what does it specifically mean for your accounting during that time?
Simply put, it means that the best way to prepare for holiday accounting and for the holiday season altogether is to prepare early.
Our best tip? Start now.
So, we want to highlight the top 8 ways that you can prepare your small businesses’ bookkeeping and accounting for year end and the holidays. Those top accounting and bookkeeping holiday tips are:
- Start preparing early and organize early!
- Ask yourself some important questions.
- Be flexible, nobody likes a scrooge.
- Lean into your technology, big time.
- Focus on cash flow and receivables.
- Organize taxes and get your write offs ready.
- Do your due diligence.
- Chat with your accountant!
1. Start preparing and organizing early!
We’ve said it countless articles, and even several times already in this blog, but one of the most important things for small businesses is to get the books organized as early as possible.
We all know that many small business owners may not have all the time in the world to organize their books on a daily or even weekly basis. After all, you have a lot of other things to focus on… Like run a business.
So, our best and most important tip is to just make sure that your books (and business) are in good shape heading into the holiday season.
Make sure that you have your receivables and payables all sorted out, have your reconciliations ready to… well, reconcile, have payroll and taxes ready to go, and make sure that you know with a fair degree of accuracy where everything stands.
Want to go one step further? Want to relieve some headaches down the road? Make sure that even smaller things like expenses, office supplies, inventory, and those day-to-day expenses are organized to the best of your ability throughout the holiday season and beyond.
The best bet is to organize the books and get yourself financially ready for December through February.
It’s a busy time of year, between Christmas and other December holidays, New Years, and Valentines day in a relatively short time frame.
So, clean your books to hit the ground running and to not get lost in the shuffle of the holidays.
2. Ask those important questions
This is an accounting blog for small businesses in Vancouver… Why are we asking questions?
Well, around the holiday season, we’ve compiled a list of a half-dozen questions that you can ask yourself and your accountant to support with #1, in preparing your bookkeeping for the holiday season.
- Have all your outstanding invoices been sent out for the end of the year? And do you know when they’re coming back?
- Is your inventory accounted for, and recorded?
- Are all your accounts and books up to date?
- Is your bookkeeper ready, and what support do they need during the holidays?
- What is your cash flow looking like? Can you support yourself right now?
- Do you have technology and automations in place?
These are some questions that you can ask yourself and transform into a “holiday bookkeeping checklist” in order to make sure that you’re ready to go, and you can go sleigh the small business holiday season.
3. Don’t be Scrooge
We get it… Money can be tight during the holiday season, and we’ll address that in some later sections. That’s also why we’re telling you to ask yourself how your cash flow is looking, and if you’re sent all your invoices out.
However, it’s important to understand that you need to be flexible.
Chances are… In an economy like Vancouver, you’re not the only small business that might be feeling a pinch during the holiday season.
So, this bookkeeping tip is less focused on your books and accounts but focused on building those ever-important relationships with your employees, customers, suppliers, and partners.
Being a bit flexible during the holiday season, and understand that your partners, suppliers or customers are trying just as hard as you to pay their bills. If they end up being a few days late (provided they don’t abuse this, and they actually pay you), then give them that leeway so they can pay you on January 2nd, instead of during the middle of festivities on the 31st.
Likewise, understand that your own expenses are going to be higher. Don’t be a scrooge and hide the credit cards, just to cut down your spending.
Take care of your people, and they’ll take care of your small business.
4. Lean into your technology
Not much to say here, except during the holidays, you can really lean into your bookkeeping technology.
Whether that’s creating invoicing automations, pre-submitting payroll information, using automatic payment systems to keep your payables in check… You name it.
The best automations and technology that we suggest leaning into during the holidays include:
- General bookkeeping software like QuickBooks,
- Accounts payable software to pay your bills on time,
- Online banking to schedule credit card and online payments,
- Automatic invoicing and payroll software,
Using these few tools that are readily at your disposal ensure that holiday bookkeeping can be made significantly easier
5. Keep an eye on your cash flow
The holiday season is a time of the year when money moves fast.
So, that means it’s a more important time than ever to make sure that you’re keeping a close eye on your cash flow to make sure you don’t dip into the red during the holidays.
Looking back on our first holiday bookkeeping tip, one of the most important things you can do in terms of cash flow is to make sure that you have ample cash coming in during the holidays.
As a small business, you should be collecting on receivables before diving headfirst into the holidays, and you should make sure that during the busy season you know exactly what’s coming in, and what’s going out.
6. Write off into the night
We’re not saying that absolutely everything should be a write off, because that’s not always best practice.
However, like we’ve said countless times already, the holidays are busy times for small businesses… And we doubt that taxes are front of mind when there’s a cool glass of egg nog and a turkey dinner in front of you.
Having those write offs ready and a list of expenses prepared before the holiday season, and as you make your way through, will make holiday bookkeeping much easier.
It’s also going to make taxes much less of a headache come the new year.
7. Do your due diligence
To this point, we’ve continued to say that the best way to make holiday bookkeeping simpler and less of a headache is to prepare, prepare, prepare.
However, something equally as important is to keep that dedication and attention to detail going!
Whether you, as the business owner, or your accountant are taking care of your holiday bookkeeping, keep on top of keeping diligent and clean records.
Track everything that goes in-and-out from a cash perspective through invoices, credit card statements, receivables, and other payments that may be coming in or out of your business.
Likewise, make sure you keep an eye on payroll, inventory (if you have it), taxes, deductible write-offs, and just about everything in between.
If you can keep a close eye on those holiday books during the busy season, your January and February reconciliations will be easier than ever and will help your small business plunge into the new year with fewer headaches and financial struggles.
8. Work with your accountant!
Our last holiday bookkeeping tip for your small business is an easy one!
Chat with your accountant as you prepare, work with them through the busy season, and make sure you recap and regroup with them once the season is over.
Need help from an expert?
There are lots of ins-and-outs of holiday bookkeeping, so let one of our experts at Valley Business Centre – Bookkeeping & Payroll help. For over 30 years, Valley Business Centre has been providing comprehensive bookkeeping, payroll and tax services to our clients in Whistler, Squamish, the Sea to Sky Corridor and metro Vancouver B.C. areas. Valley Business Centre provides reliable and effective services to all clients.
This article is written for informational purposes only. It is current at the date of posting and changes to laws and regulation may result in the information becoming outdated. It is not intended to provide legal, tax, or financial advice. It is recommended that readers get advice from a tax professional before making any final decisions.