It’s 2018 and another year is just beginning! Most of us spend the first few days of the year reflecting on how things went last year and often think about ways we can improve and grow in the next 12 months. There is something about beginning a new year that invigorates us and motivates us to make positive changes in our personal and professional lives. Sure there are things every business does in the new year like set up new files and folders for the upcoming year (hopefully virtual folder using a cloud storage app like Sharefile or Smartvault, paper files are so 2004!) but there are other tasks that should also always be done at the start of each year so I’ve put together a list of housekeeping tasks every business should do in the new year.
#1 Revisit your vision, mission, and purpose
The beginning of the year is a great time to revisit your organization’s vision, mission, and purpose. During the year, things happen and sometimes we run astray from our original purpose and plans. Perhaps a change in staff or team leadership has affected the firm dynamic or you have gained a client that doesn’t fit with your firm processes, culture or direction. Events that happen throughout the year can impact us so profoundly that they knock us off course and we feel as though we’re headed in a direction that isn’t in line with our original plans. When this happens, it’s important to take the time to evaluate where your firm is compared to where you intended it to be and be honest about the impact these events had on your business over the past year. If the impact caused a positive change, it may be necessary to redefine the ultimate direction of your business. If the event exposed a vulnerability you didn’t anticipate, then it’s time to re-evaluate your firm’s processes and possibly even its core values to make sure your business gets back on course. There are tons of resources and coaching around determining your organization’s core values, vision, mission, and purpose. Check out one of my favorite books on finding your purpose by Simon Sinek, Start with Why.
#2 Get updated tax identification forms from your service vendors and employees
Every business is required to have tax identification information for individuals and certain businesses that they pay for services provided to the business. Employees complete and sign a form W-4 to provide you with their social security number, address and withholding information and businesses or independent contractors who provide services provide a Form W-9. It’s a best practice to request a new form each year to ensure that you have workers’ current information before you prepare and file the required forms W-2 or 1099 that are due by the end of January each year. Sometimes people move, get married or divorced, or their filing status or withholding allowances may have changed and they forget to let you know about these changes on their own. I typically send along a new form along with a wish of a Happy New Year to my vendors and employees at the beginning of each year.
Resources regarding proper documentation for workers and employer responsibilities:
- Determining whether a worker is an employee or contractor – IRS.gov
- Instructions for Form W-9
- IRS Publication 15 Employer’s Tax Guide
#3 Take an inventory of the apps and services you use
Ideally, you should keep an inventory of the apps and services you use regularly in your business and update it throughout the year as changes are made. However, we all know that sometimes these are precisely the types of tasks get pushed to the side during the year because we are busy with client and other work. The beginning of the new year is a great time to take an inventory because you will be reviewing your financial records for the prior year and will be looking over financial transactions anyway. As you complete your review, you may find charges for apps or services you no longer use but are still paying for. This can save you money going forward and once you have created the initial app/service inventory you can set a reminder to add any new app subscriptions to the list throughout the year.
Use this free inventory app worksheet to get started!
#4 Update the tax rates in your accounting and other apps
While many apps that calculate taxes, such as payroll or sales tax, will automatically update the rates used at the beginning of a new tax year, many still do not. It’s a best practice to set aside some time at the beginning of the year to go through your apps to make sure they have the correct rates. In fact, some tax rates are specific to the taxpayer and must be updated manually, such as an unemployment experience rate or workers comp insurance rates. If you are using an app to record mileage, you may need to update the mileage rate as well. As a tax professional, I have seen countless clients (and sometimes practitioners) that have forgotten to update their rates and have created additional work for themselves when it came time to file and pay their taxes. This is especially important if you are withholding or collecting tax on behalf of others. Better yet, subscribe to an app that you know will automatically update the tax rates for you! Here are some links to resources around various tax rates and changes:
#5 Record your odometer readings for your vehicles
There are a few great apps out there now that can automatically track your vehicle mileage as you drive which is a huge win for us accountant types who have struggled with client compliance in this area. Two of my favorites are MileIQ and QuickBooks Self-Employed (which does a whole lot more than just track mileage – find out in this article). Both of these apps have mobile versions that use the GPS technology built into your smartphone to track your miles as you drive. However, while these apps track the mileage, it’s still required to log your vehicle’s odometer reading at the beginning of the year in order to complete required tax forms and to be fully compliant with the tax code. In fact, set a reminder in your phone to remind you every year on January 1st to jot down the reading and log it into your app.
Use the new year as a fresh start to tackle some of these business housekeeping items that sometimes get missed during the hustle of day to day business. Just like making your bed first thing in the morning can set the tone for your entire day, doing these 5 tasks at the beginning of the year can get your entire year off to a great start! And Happy New Year to you and yours 🙂