Setting Up Your Financial Success for the New Year
The New Year can be a great time for reflection and goal setting for all of us. If you own a small business, the end of the year is a time for review and preparation, which can get pretty hectic and stressful.
As the month of December quickly comes to an end, here are some tips for financial success for the New Year.
Tips for Financial Success
Check payroll and benefits
It’s easy to let things slip through the cracks sometimes, but payroll and benefits should never be one of them. Make sure you are paying all your employees on time and the right amount.
You want your business running as efficiently and smoothly as possible, which means your inventory should be up-to-date, organized, and damaged inventory should be discarded and written off. Take advantage of deductions by purchasing office supplies and upgrading equipment before the end of the year.
Fix Accounting Mistakes
Review your ledger and financial reports to make sure everything has been accounted for and reported correctly. Common errors include missed payments, invoices, and expenses, computational errors, and missing reports. Also make the decision to write off customers who ultimately did not pay their invoices.
Past performance is the best indicator of future success. Reviewing your finances of Q3 gives you the opportunity to evaluate what is working, and what needs improvement within your small business. Doing this before the New Year gives you time to make the necessary adjustments and changes before Q1.
These are some areas you should consider when reviewing your finances and planning for the New Year:
Prepare for Tax Season
With your accountant, look at how much you’ve paid in taxes for the year, and if you’re on track to owe more or less in the upcoming year. Consider sales projections and how new products or services could change that in the New Year. Make a strategy to maximize profits and minimize taxes.
Profits and Missed Opportunities
The best way to prepare for the New Year is to determine what is working and what isn’t in terms of profit. Determine which products or services are making up the biggest share of revenue, and consider expanding those. Of those products and services, think about eliminating the ones that are underperforming. Identify where most of your business expenses are coming from, and see if you can adjust that spending or cut it entirely.
Set Financial Goals
The end of the year is the best time to determine the direction of your small business. Dig deep into your business’s identity and mission to decide if you are on track, or need to make changes. Think about your priorities for the New Year: are you generating enough sales? Are customers returning? Are you satisfied with your suppliers and vendors?
Then, look at the problems your small business faced this year. What were you not able to accomplish? What was holding you back? Think about how you can redirect your time and money to generate growth and revenue, and reduce losses.
Finally, set at least three realistic goals for your business. Considering how your business performed this year, what are some areas that need improvement, or areas that can stay the same? These are difficult, introspective questions, but are the key to financial success in the New Year.
Looking to take something off your financial plate next year? GritForce Bookkeeping is here to help companies do what they do best! They provide a virtual bookkeeping service, personalized for small businesses and non-profit organizations. GritForce works with you to get your books in order so you can focus on your main priorities. Their goal is to assist you to understand your financial position, enabling you to make smarter, informed decisions.