By Patrick Bonnaure, Founder of ProLedge Bookkeeping Services
In late December and early January, bookkeepers’ phones tend to ring quite a bit. Why is that? A lot of is driven by tax deadlines, but a surprising number of these calls seem to be driven by New Year resolutions. Isn’t this a bit odd? Aren’t there more glamorous resolutions to make? Help a hungry kid in Africa. Perform an act of kindness every day… But bookkeeping?!? Hey, I won’t complain. ProLedge is on the receiving end of that trend.
Let’s look at the likely factors for surges in bookkeeping needs at the turn of the year.
1099s need to be sent to your vendors and contractors by end of January. In order to do this, you need to draw the list of vendors whom you paid $600 or more in the previous year. In order to know that, your books need to be up-to-date well before the end of January.
CPA hate with a passion having their clients send them their books at the last minute to complete their tax returns. Many CPAs start nagging their clients to get their books up-to-date as soon as possible so that the CPA can spread his/her workload over a longer period of time.
Lull in the Business
There is this wonderful week between Christmas and New Year when the business slows down and the clients get mellower. Many business owners take this opportunity to catch their breath and look at their back office. That’s often when the bookkeeping backlog stares them in the eyes.
Since the calendar year is also the fiscal year for most small businesses, January tends to be the month for planning, forecasting and budgeting. Your books need to be current to do this effectively.
And yes… New Year’s Resolutions
Most of the New Year’s resolutions that I hear about fall into two categories: aspirational (we’ll make the world a better place) and guilt. No doubt that QuickBooks and bookkeeping fall into the guilt bucket, along with weight loss, exercise and making your bed. And like with these other resolutions, they’re hard to keep. At Jenny Craig, they assign a consultant to you to help you stick to the program. It could be that your bookkeeper plays that role too, but only if the bookkeeper is proactive in reminding you to give her your data regularly.
Whatever your driver is, getting caught-up with your books is never a bad idea. Unlike with diets, there is never a risk of overdoing it with bookkeeping.