With the end of 2020 fast approaching, we’re going to look at annual financial reports. Your shop’s financial report is being prepared and there are some steps for you to take. There are also steps you can take to prepare for a solid start to the new year.

The content of this blog comes from two checklists provided by Three Rivers Bookkeeping. If you would like copies of these checklists, ask by phone or email at the bottom of this post. I would love to deliver these useful tools to you.

Let’s start with a quick explanation of the annual report. Annual reports contain your repair shop’s operating and financial activities over the past year. These reports serve two functions:

1. To evaluate your shop’s financial performance
2. Guide you to make future strategic financial decisions.

Here is an end of year checklist. You, the shop owner use these items and so does your bookkeeper. These items are the foundation of your annual report.

End of Year Checklist:
 All bank and credit card account reconciled
 Are there any duplicate transactions?

Income Statement for the year
 Compare to the previous year
 Are all the transactions properly categorized?
 Are there items in miscellaneous/uncategorized accounts?
 Are there any “Ask my Accountant” items?
 Do payroll expenses match what was paid for the year? (940/941, state unemployment)
 Calculate gross profit percentage of net revenue

Balance Sheet for the year
 Review each Balance Sheet account
 Assets
    All transactions are like type and belong in that account
    All adjusting entries are accounted for and
    All account balances make sense
 Liabilities
    All transactions are like type and belong in that account
    All adjusting entries are accounted for and

    All account balances make sense
 Equity
    All transactions are like type and belong in that account
    All adjusting entries are accounted for and
    All account balances make sense

Last, let’s look at a checklist that will prepare you for the new year and thinking ahead.

New Year Checklist:
 Make updates to payroll withholding rates, if the rates have changed
 Does payroll reflect the correct unemployment rate?
 Start a new budget
 Fill out the business calendar of important tax dates
 Set some goals!

My goal in showing you this information is that you will see what to expect at the end of the year. Looking at the new year, this should get you thinking and planning for an outstanding 2021!

If I may assist you in any way or if you’d like copies of the checklists outlined above, send an email to me at [email protected]