Welcome to The Shaw Atlas, the monthly newsletter from Shaw & Associates, CPAs & Financial Advisors. We look forward to keeping you abreast of ever-changing tax codes, providing you with money saving accounting tips and illustrating proactive strategies to help you achieve the financial life you envision.
Business Year-End Strategies
Business owners, are you ready for year-end? You know we are going to be asking you many questions over the next few months. To make sure your year-end is quicker and easier this year, here are some things you can do in advance to get ready.
Auto usage: Have you been tracking your business auto mileage all year? Now is the time to get your records in order and to fill in any gaps you may have. At tax time, we will need to know the following information per each vehicle that you use for business:
- Year/make model
- Business miles 2015
- Total miles 2015
- Purchase or sale documents for any autos you may have bought, sold, or traded during 2015.
Remember, however, the IRS requires you to have much more data in your records than just these items (you just don’t have to give the detail to us). If you need a refresher of what all you should be tracking related to auto usage, click HERE.
Reconciliations: Make sure all your account reconciliations are up-to-date and are clean. This includes all bank accounts, credit card accounts, and loan accounts that you have in your books. After completing any reconciliation in QuickBooks, you should look to see if there are still old items on your reconciliation screen that have not cleared. This could be due to, for instance, actual checks that have not yet been cashed by the recipient, or it could indicate actual data entry errors which likely will require some adjustments. And, since many banks and credit card companies offer online statement access, you don’t have to wait to receive that last statement in the mail to get this step completed in early January.
Accounts Receivable and Accounts Payable: Generate an “A/R Aging Summary” report and an “A/P Aging Summary” report in QuickBooks and scan each to make sure they look accurate. Two particular things to look for are items in the > 90 column that are old and either incorrect or require an increased level of attention, and negative balances that likely are incorrect.
Review your Balance Sheet: Generate a “Balance Sheet Previous Year Comparison” in QuickBooks. In the “As of” field at the top of the screen, enter 12/31/15. Review all asset and liability account balances and make sure they make sense. Every line on the balance sheet ties to something, so, for example, if you see an inventory asset account, the balance should tie to a physical count you completed at or very close to year end. If your bank, credit card, and loan accounts are reconciled and the uncleared items cleaned up (see Reconciliations paragraph above), then those balances should be accurate. For some accounts, such as fixed assets, I like to look at the $ Change column. Keep in mind the Balance Sheet is a snapshot of your financial position as of a certain date. If you have been purchasing equipment or other business assets for years, glancing at one large number on the Balance Sheet may not have meaning for you, but if you look at the $ Change, you can see how much you have added since the prior year end, which may be more meaningful.
Review your P&L: Generate a “Profit & Loss Previous Year Comparison” in QuickBooks, and make sure in the “Dates” field it says This Fiscal Year-do-date. Review this report to make sure it makes sense. Are the amounts reasonable compared to the previous year? If not, as the business owner, do the variances make sense to you based on what you know about your business this year? Are there negative balances or other items that don’t make sense? You can drill down on any amounts in the current year or prior year column by double clicking on the amount to see the detail behind the numbers.
1099’s: Whether you prepare the 1099’s internally, or whether we prepare them for you, now is the time to make sure your records are complete and organized. A form 1099-Miscellaneous is required to be issued in January to any non-corporation vendor to whom your business paid greater than $600 in 2015 for services or rents. Remember, an LLC is not a corporation. Now is the time to make sure you have collected all necessary vendor tax ID numbers and that you have these expenses recorded appropriately in your books. For more information on 1099’s, click HERE.
These can be complex topics that could fill many pages; the above is just intended to be a summary to get you started. If you would like more information about any of these items or assistance from us in getting ready for year-end, please contact us. We are always happy to help.
Client Spotlight- Bike Fort Collins
Did you know that Fort Collins is on top of THREE Bike-Friendly lists as designated by the League of American Bicyclist?
- Bike Friendly Community – Fort Collins is one of five communities in the entire U.S. to receive a “platinum” rating for bike friendliness – the highest rating possible
- Bike Friendly University – CSU just received the highest bike friendly designation, among only three other colleges and universities in the country.
- Bike Friendly Businesses – Fort Collins is tops in the nation for having the most Bike Friendly businesses designated in one town – we have about 40 participating so far!. A Bicycle Friendly Community, Business, or University welcomes bicyclists by providing safe accommodations for bicycling and encouraging people to bike for transportation and recreation. A bicycle-friendly place makes bicycling safe, comfortable, and convenient for people of all ages and abilities.
Bike Fort Collins (BFC) is the region’s primary bike advocacy non-profit and we’ve had a hand in all things bike in NoCo for over a decade. From advocating for safer streets, to educating kids and adults about safe cycling, to fun events celebrating our unique bike culture, Bike Fort Collins is the community hub that gets people riding, gets cyclists involved as volunteers and advocates, and makes our infrastructure safer and more inviting for new cyclists. This positive feedback loop is great for our neighborhoods, our bodies, and our wallets.
Our partnership with Shaw & Associates has been instrumental during our recent significant growth. Shaw & Associates understands the needs and responsibilities of a nonprofit board overseeing an organization and has been particularly helpful in guiding our diverse board to master financial literacy. We are grateful for the experience and knowledge Shaw & Associates provides BFC throughout the year and we know we can always count on them to take care of the detail so we can concentrate on what we do best: advocate for safe and enjoyable cycling!
Follow us on Facebook at facebook.com/BikeFortCollins, check out our website at bikefortcollins.org, where you can subscribe to our newsletter, and consider joining and volunteering to support our ongoing work.
Colorado Gives Day
For the sixth year, Community First Foundation and FirstBank are partnering to present Colorado Gives Day on Tuesday, December 8, 2015. Colorado Gives Day is an annual statewide movement to celebrate and increase philanthropy in Colorado through online giving.
Please consider giving your tax-deductible donation to one of the many local organizations we sponsor on an annual basis from the list.