Your essential business accounting year-end checklist

Whether you’re an eCommerce retailer or a wholesaler, it’s important to start preparing for tax season as early as possible.

Tax season is a busy (and stressful) time for SMBs, and it’s important to ensure that you’re prepared, organised and on time when it comes to filing your taxes - otherwise you may cost your business time and expense in penalties.

If you’re getting ready to file your business taxes in 2020, our accounting year-end checklist can help you ensure everything is squared away when tax time rolls around.

Check what type of tax return you need to file

No matter which country you’re in, it’s likely that there are different types of tax laws for different types of businesses, and this means you need to be mindful of which type of tax return your business needs to file.

The type of tax return you will need to file depends on the legal structure of your business. For example, businesses operating under a sole proprietorship or partnership will differ from businesses registered as a company.

When you start the preparations for your tax return, make sure to check with the tax office in your region or state ahead of time so that you know what forms and documentation are required for your business.

Double check your tax return deadlines

Each country has a deadline for businesses and individuals to file tax deadlines. These deadlines can vary depending on the country you’re based in and the type of business you have, but regular tax return filing deadlines are as follows:

USA: April 15, 2020

Australia: February 28, 2020 (assuming financial year ending 30th June 2019).

New Zealand: July 7 (without an accountant) 31 March the following year (with an accountant) - assuming a financial year ending 31st March 2020

Canada: 6 months after the year-end, so typically June 30, 2020 - assuming a December 31, 2019 year end

UK: December 31, 2020, assuming your company ends 31 March.

Singapore: March 30, 2020 the ECI (Estimated Chargeable Income) is due for filing, assuming the financial year ended on December 31, 2019. Final tax returns are due for filing on 30 Nov 2019.

Hong Kong: 2 May

These dates are a general guide. When you’re preparing for tax time, it’s best to double check the deadlines for your business’ circumstances and speak to your accountant if you’re unsure.

Organize your documentation & automate the tax return process

When you’re preparing your business’ accounting and tax return documents, it’s always important to keep your files on hand in case your business is audited and you need to provide documentation to support your reported income and deductions. This happens in almost every country and, without receipts, the government can disallow any expenses you claim and you could be hit with a penalty.

As an SMB, you have limited time to take care of paperwork, and staying on top of your receipts throughout the year can help minimize your workload come tax time. Regardless of whether you have been keeping up with your income and expenses, here are some best practices to put in place to help your business in the future:

Accounting year-end checklist

1. Reduce paperwork and go paperless 

Going paperless can save SMBs from headaches during tax time, as all your receipts are stored in one place for easy access when you need them. Scan all your receipts and organize them, whether by vendor name and/or function, so you can easily track the different types of spending you have and with which businesses. Keep all receipts for a particular year together, which is not only useful in case you’re audited but also makes sharing business information with other people like your accountant a lot easier.

Going back and taking photos of receipts can be time-consuming, so try to do this every time you have a new business expense. There are also digital tools out there to help: Xero, for example, has a secure tool for uploading images of business expense receipts, so you don’t have to worry about keeping physical receipts.

2. Utilize tools like Xero or Quickbooks Online for accounting automation

Automation can help SMBs reduce workload and errors, and increase efficiency and productivity. Xero and QuickBooks Online (QBO) are essential business tools to help automate your accounting processes and reduce the need for manual administrative tasks. They also keep everything stored and searchable in a central location so that you can access them anywhere, anytime, which is particularly handy come tax time.

What’s more, as Xero and QBO can be integrated with TradeGecko, you can manage all your business needs in the one place.

3. Find the right accountant or bookkeeper

As an SMB, the sooner you get on top of your accounting, the better. This is why for many new small businesses, the first order of business is to fill the accountant role. While smart accounting software like Xero and QBO is hugely valuable in cutting down on admin and organizing key documentation, a small business accountant can assist with tax strategies to save you time and money, and provide sound advice about year-end bookkeeping whilst keeping your business tax compliant.

When you’re searching for your accountant or bookkeeper, it’s best to find someone who is familiar with your industry and has previous experience in eCommerce, as there are some sales tax rules and tax deductions that are different for businesses selling online

4. Investigate potential tax deductions and discounts

Depending on the type of business you run, there are likely to be plenty of legitimate deductions that you can claim on your tax return. These can include home office expenses, business expenses, travel and transportation costs, and depreciation of capital.

Tax deductions can reduce the amount of tax your business needs to pay, which means more money to spend on growing your online store. Check with an accounting professional to see exactly which deductions your business may be eligible for.

5. Budget for installment payments

If your tax payable is above a certain threshold, you’ll likely have to pay tax in quarterly installments in the future. In addition, some countries (like Australia) also have monthly tax installments.

Double check exactly what installment payments you need to make on an annual basis, and make sure to account for these tax payments in your budget to avoid having to pay a hefty bill come next tax season.