Nothing like the first of a new fiscal year to start up a new, fresh bookkeeping system. January is a busy month for me with year end closing, tax filings, W-2's, 1099's, etc. But mostly with clients who want to start fresh with a new bookkeeping system and maybe even a new bookkeeper.
January really is the best time to start fresh if your fiscal year starts in January. But even if your fiscal year doesn't start in January, if you have payroll, January is by far the best time to start a new set of books. If you start mid-year on your payroll, you will have to go back and re-input your payroll into your accounting program since payroll accumulates over the course of the year.
Here are some things to remember when you are starting a new year whether you are starting a new system or not:
1) Make sure all of your employees have new W-4's filled out if there are any changes. W-4 forms are for you (the employer) to make sure you are withholding the right amount of federal income tax from what you are paying them.
2) Double check all your employees address's and social security numbers for accuracy. It makes W-2 time much faster and easier.
3) Make sure you have I-9 forms for all your employees and that you have followed your states rules on reporting any new employees. All U.S. employers must complete and retain a Form I-9 for each individual they hire for employment in the United States. This includes citizens and noncitizens. On the form, the employer must examine the employment eligibility and identity document(s) an employee presents to determine whether the document(s) reasonably appear to be genuine and relate to the individual and record the document information on the Form I-9. The list of acceptable documents can be found on the last page of the form.
Do not file Form I-9 with U.S. Immigrations and Customs Enforcement (ICE) or USCIS. Form I-9 must be kept by the employer either for three years after the date of hire or for one year after employment is terminated, whichever is later. The form must be available for inspection by authorized U.S. Government officials (e.g., Department of Homeland Security, Department of Labor, Department of Justice).
4) Make sure and get all your supplies needed for year end (i.e. W-2 forms needed for your accounting software, envelopes, postage stamps, letterhead, etc.) ahead of time. It really makes it faster and easier when that's all taken care of before you sit down to process all your year end reports.
These are just a few things that can help you get the year started off on the right foot. Check out my website for other important forms you might need for your business.
More next week on a comparison of accounting software...
