1851

While the new year is a time to get a fresh start, it can also be a hectic time of year. In a post-holiday daze, businesses can be left with loose ends to tie up, specifically with accounting, that could and should have been dealt with before the clock ticks to midnight.&nbsp; To help franchisees get a head start on the process, 1851 Franchise connected with Rick Coyne, CPA Partner at <a href="https://www.withum.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=4-end-of-the-year-accounting-tips-for-franchisees-2704924" target="_blank" rel="nofollow">WithumSmith + Brown</a>; Tommy Lee, CPA Partner at <a href="https://www.aprio.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=4-end-of-the-year-accounting-tips-for-franchisees-2704924" target="_blank" rel="nofollow">Aprio</a>&nbsp;(formerly HA&amp;W)&nbsp;and Sharon Powills, CPA and CFO of <a href="http://nolimitagency.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=4-end-of-the-year-accounting-tips-for-franchisees-2704924" target="_blank" rel="nofollow">No Limit Agency*</a>.

Coyne, Lee and Powills shared tips on how franchisees can make sure the financials are in order to close out the year, and prepare for an organized year ahead.

1. Get your books in order before the new year

&ldquo;Use the fourth quarter to get your books in order prior to the end of the year,&rdquo; said Lee. &ldquo;In small to mid-sized businesses, some decisions that franchisees can make prior to the end of the year can save in a big way during tax time.&rdquo;

Coyne suggested a similar tip.

&ldquo;Run tax projections to get an idea of where they are so there are no surprises in the future,&rdquo; said Coyne. &ldquo;This is a time to think about things you can do to bring this tax liability down.&rdquo;

And though it means extra work towards organization, keeping everything in order is a much simpler task when everything is sorted and accounted for.

&ldquo;Having transactions that are properly organized and coded, with clear business reasons for each expense, and receipts to go with, will make the rest of your tax life easier,&rdquo; said Powills. &ldquo;While everyday accounting labor doesn&rsquo;t cost a lot, tax professionals do. I&rsquo;d suggest spending the lower cost money on labor and keeping your books organized so your tax professional has to do less work.&rdquo;

2. Put a retirement plan in place

Putting money away for retirement is not a new concept, but it&rsquo;s not always stressed as it should be.

&ldquo;If you don&rsquo;t already have a retirement plan in place for your business, the end of the year is your last chance to establish one,&rdquo; said Lee. &ldquo;Retirement plans can be the first line of defense against taxes deferring to income taxes. In the right circumstances, if you had a profitable year, you can sometimes be surprised what you are able to put away in a retirement plan.&rdquo;

3. Dish out employee bonuses and circle back on charity partnerships

Similar to developing retirement plans, bonuses should be considered for the fourth quarter.

&ldquo;In many businesses, the fourth quarter yields the most cash,&rdquo; said Lee. &ldquo;I encourage clients to set up their bonus programs to pay out in fourth quarter because it&rsquo;s good for both employees and for taxes. Why wait until the next year to get the tax benefit of these bonuses?&rdquo;

Coyne suggested to also think back to any charitable partnerships.

&ldquo;When you have charitable contributions, you can decrease taxable income,&rdquo; said Coyne. &ldquo;The benefit is actually two-fold, as it&rsquo;s great to give back to the community where you have a presence.&rdquo;

4. Consider any supplies or equipment needed 

Finally, it is important to think ahead on supplies or equipment needed for the next year.

&ldquo;So many tax advisors try to &lsquo;help&rsquo; their clients by advising them to bulk up on expenses at the end of the year to make the net income look lower, hence lowing taxes. Though, this is a short-term solution,&rdquo; said Powills. &ldquo;If you buy in bulk at the end of the year, you only defer the amount of tax you owe, not lower it. Take a deeper look at the strategy and make sure you are actually saving money on your taxes and it isn&rsquo;t just a perception.&rdquo;

While the fourth quarter is already competing with some of the biggest holidays, it is also an important time to get ahead before it is too late. The extra work that goes into organizing before the new year is worth avoiding the time and headache it may cause if a franchisee falls behind on getting everything in order before tax season.

Make sure to get everything in order, figure out areas where money can be invested like retirement and bonus plans, and brainstorm what will be needed the following year and the next year should be off to a great start.

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4 End of the Year Accounting Tips for Franchisees

1851 Franchise

With new tax legislation still pending, 1851 Franchise Magazine connects with 3 CPA's to hear about tips for individual franchisees on how best to close out the year with financials in place.

This brand page has been paid for by 1851. Content within this page that is paid will showcase a Sponsored icon. This means the brand has engaged 1851 FRANCHISE to write the content. Content without the Sponsored Icon is aggregated media placements the brand earned. Questions can be sent to editorial@1851franchise.com

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