As an accounting major in college, I quickly learned all of the complicated parts of the accounting cycle. I discovered how to input the details of business transactions into a computerized accounting system. At the end of an accounting cycle, such as a month, I became experienced with calculating the revenue for the period. If you’re starting a new business, determining an accurate amount of revenue for each accounting cycle is crucial. You must know how much profit you’re making each accounting period in order to be successful in the long-term. On this blog, you will discover how an experienced accountant can help you keep track of your revenue.
Do you need to wind down and close your small business? Whether you're closing your doors for personal reasons, financial reasons, or outside forces, you would do well to get the right help with this one final step. One person who can help in a variety of ways is a certified public accountant (CPA). What can they do for your business in these final days? Here are a few important tasks.
1. Closing the Books
Closing up your accounting ensures that you have all the accurate data needed to do final paperwork, pay vendors correctly, ensure you were paid all money owed to you, and even prepare the business (or portions of it) for sale. An accountant can help ensure the most accurate ending books and prepare the final documents you'll need.
2. Paying All Taxes
A small business owner's tax obligations don't disappear when their company closes down. Any unpaid sales or use taxes, withholding taxes, or property taxes could become your personal liability if the business doesn't remit them before it shuts down. Your accountant will analyze your tax collection and remittances to make sure you don't owe anything else.
3. Preparing for Bankruptcy
Many businesses choose to or have to declare bankruptcy in order to close down. If your small enterprise or you personally need to file for protection, you'll need to prepare for your case. This calls for determining all the relevant assets and debts, valuing assets, creating accurate financial documents, and finding the most appropriate bankruptcy chapter. An accountant can help with all these tasks.
4. Paying Vendors
Once the last of your business income is gone, you won't have another chance to pay vendors from the company books. And if you are a sole proprietor or personally guaranteed any credit, you will be responsible for missed payments. Ask your accountant to help ensure that everyone is paid correctly and even to negotiate with vendors if you can't pay everyone in full.
5. Completing Final Tax Returns
In the year you close the business — and possibly after that — you'll likely still need to file income tax returns. Final returns are the last chance to take business deductions, declare all income or tax credits, use depreciation, and take advantage of any carryover tax benefits. Every business owner should get help preparing these final year returns.
Want to know more about how a CPA can help you wind up your business? Start by meeting with a public accountant in your state today. With professional guidance, you can have the smoothest transition possible and get ready for whatever life brings you next.
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