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As the end of 2020 approaches, now is the time to start preparing to make your end of the year as easy and stress-free as possible. It may still be November, but it’s never too early to start taking steps to make sure you start 2021 on the right financial footing. That means cleaning the house and making sure your books are in order well before it’s time to pull out your 2021 calendar. Below are the top seven tips from the Constellation1 back office team for you. ensure that you are ready to ring for the new year.

1. Make sure your software is up to date.
Using the most up-to-date software is especially important at the end of the year to ensure that your platform accommodates any applicable regulatory changes. If you’re using QuickBooks®, make sure you’ve upgraded your app to the latest version. This will ensure that you have access to the latest tax forms, especially the 1099s. If you’ve turned on automatic updates, you’re good to go. Otherwise, follow the QuickBooks® instructions to update your app, available here.

2. Catch up on reconciliations.
It’s important to reconcile your bank and credit card accounts so that you can track your cash flow and make sure everything is balanced. You should normally do reconciliations every month, but it’s easy to fall behind when you’re focusing on other things. Take those bank statements and start reconciling your accounts now so you don’t catch up on the last week of December. You’ll be glad you did, especially if you find something you need to fix.

3. Check your tax payments.
Have your tax payments been optimized in 2020? Ask your accountant about any new strategies or policies you should consider for 2021 so that you don’t pay too much or too little tax. Tax policies change regularly, and your accountant will have the most recent information to make sure you’re doing everything exactly.

4. Check your financial statements.
Make sure you have a complete and up-to-date balance sheet, which lists all of your assets, liabilities, equity and trial balance, which gives an overview of all your general ledger accounts and their balances. Are there any discrepancies? Be sure to review and correct them before the end of the year.

5. Check the employee settings.
Did you hire new employees in 2020? Make sure they are set up correctly in your system so that when it comes time to issue year-end tax return documents (W-2 in the US or T4 in Canada), you don’t have to worry about no delay. You can of course issue updated and corrected forms, but why not do it right the first time?

6. Check the provider, agent, and CI settings.
Make sure that all of your suppliers, agents and independent contractors are set up correctly so that everyone who needs them receives a 1099-MISC or the new 1099-NEC (in the US) or T4A (in Canada), at the end of the year. You don’t want to find out that there was a problem after the filing deadline.

7. Plan for 2021.
The end of the year is a great time to sit down and look at your numbers. Did you grow taller this year, or are your numbers flat? Have you improved your profitability or are you seeing a downward trend? The end of each exercise is an opportunity to assess your past goals and whether you have achieved them, to take stock of your other accomplishments, to look for improvements and to set new goals for the coming year. By writing down your goals and formalizing them, you are also more likely to achieve them (like many psychologists to agree).

The end of the year is a time filled with cozy winter nights and vacation preparations, and it’s also a good time to set yourself up for success for the year ahead. By starting to make your EOY preparations well in advance, you won’t have to worry about turning on your computer the day after New Year’s Day.

If you are looking for a versatile accounting tool to power your brokerage house, consider Constellation1 Accounting and our full range of back office solutions. Better yet, see for yourself! Book a personal tour today.

Rachel Bottineau, Vice President of Operations, Back Office at Constellation1. Bottineau is an experienced leader in brokerage operations. She has helped thousands of brokerage firms implement back office and front office software over the past 15 years and is a key resource for advice on the who, what and why for brokerage technology. .


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