As the year comes to a close, it’s critical to assess your small business’s finances and organize your records. The end of year can easily become hectic and confusing without a plan for business owners– especially those who wear many hats. We have compiled a list of end of year tips for business owners, large and small, to help make the end of the year organized and make sure that all of your end of year business is taken care of.
Running a small business can be stressful, which might be a good indication that your company is prospering. However, it’s easy to lose focus of the larger picture in the midst of to-do lists, texts and calls, emails, employees, clients, and last-minute problems, especially as the year ends and the next year starts coming into focus.
Do you have any year-end tasks that have been being neglected? Do you have sufficient cash flow to pay your employees even during the slow season? Or how about employee bonuses, personal distributions, and new tax laws? What are your future ambitions, and what dangers and uncertainties do you and your company face? How well did your company perform over this past year and what can you expect your company to do in the coming year?
1. Prepare Financial Reports
For the end of the year, you should understand the importance of preparing and reviewing your financial documents. Examine where your money went last year to see if you are on track to reach your profit targets and cash flow requirements.
Prepare and examine your financial statements for the year as soon as possible to evaluate where your funds stand at the end of the year. Not sure where to begin? Start here:
Income Statement: summary of your revenue and costs, as well as the money you’ve gained and lost over the course of the year. Your income statement will show you if you need to reduce specific spending and will assist you in making key financial decisions.
Cash Flow Statement: details your company’s incoming and exiting funds. Seeing your cash flow for the year might help you forecast and estimate future cash flow.
Balance Sheet: displays your assets, liabilities, and equity and monitors your financial development. At the end of the year, double-check that your liabilities and equity are equivalent to your assets.
2. Prepare Your Vendor Lists
Update your critical contacts’ addresses, phone numbers, and names. Delete or archive vendors you no longer use. Make sure that you have updated and accurate contact information for your vendors. This annual cleaning will keep your lists structured and ready for orders and payments in the future year.
3. Employees: Consider Bonuses and Update Employee Information
Check that you have appropriate contact information for your employees and that employee benefits have been properly accounted for. Determine whether you will give staff bonuses and, if so, the amount.
Also ensure that you have the appropriate contracts and procedures in place for each employee, such as Employment Agreements and a company Employee Handbook. Keeping proper records keeps everyone on the same page and might help you avoid the cost and inconvenience of future personnel issues.
4. Backup Your Computers and Mobile Devices
This end of year, take time to ensure that you won’t suffer data loss in the coming year. You may believe you are protected if you utilize cloud-based software. However, experts warn against relying on a single backup mechanism, even if it is a well-known cloud-based service. It is advised to back up everything on at least two digital platforms in at least two different locations, as well as having one copy in print or on a local server or hard disk.
5. Conduct an Inventory
An end of year inventory allows you to reconcile your figures and uncover any big differences that could signal accounting concerns or theft if you keep things in your store or warehouse.
Checking your inventory will not only help you plan how much stock to have on hand at the start of the new year, but it will also tell you how much inventory you sold and its value throughout the year. Compare this year’s inventory totals to last year’s to determine whether your sales have improved over time. Forecast how much inventory you’ll need each month in the future using your inventory levels.
6. Reflect on Your Accomplishments
This end of year, create a list of your company’s accomplishments throughout the past year. It’s easy to lose sight of the accomplishments you’ve made and the challenges you’ve conquered. Making a list of them, to review at the year’s end, is an excellent way to boost your team’s moral.
Remember those company objectives you set at the end of last year/beginning of this year? Now it’s time to go through them and determine if you missed, met, or exceeded them (preferably one of the latter). Examine your goals for the coming year to determine where you stand. Consider maintaining your goals in a document or spreadsheet to organize them better and visualize your progress.
If you didn’t meet a goal, consider why you didn’t. Then, use your results to improve and set more attainable goals for the coming year. If you met or exceeded your goals, examine what you did well, and continue doing it well. Once you’ve created your list, share it with your staff and thank them for their efforts.
7. Consult Your Accountant
The end of the year is an excellent time to think about taxes. Consider reviewing your documents now to discover any difficulties that may occur with the Internal Revenue Service. Better still, speak with a tax accountant to see whether you qualify for any additional deductions. Tax deductions are easy to overlook, but they can save you money.
Many things have changed for small businesses as a result of the new tax code, including cost reporting. This makes hiring an accountant even more vital this year. Examine your financial statements and get advice on bonuses, distributions, and end of year tax plans. Discuss future tax plans as well.
Make sure your payroll records are up to date and accurate in your books before the end of the year. Conduct an audit of your employees’ payroll information to confirm that everything is in order and matches your records.
Review the following with your accountant:
- Employee information
- Tax rates
- Withheld taxes
- Employer payroll taxes
8. Consult with an Attorney
Making time for a yearly legal consultation can show you what you must do in order to stay up-to-date on legislation, contracts, and employment rules affecting your small business. An attorney can also assist you in assessing and mitigating legal dangers that you or your company may encounter. It’s important to meet with your attorney at the end of the year to go over any legal changes that your business faces and to review any legal documents before heading into the new year
9. Staffing: Determine Your Hiring and Outsourcing Requirements
The end of year is an excellent opportunity to consider the tasks you dislike or lack the time or knowledge to complete efficiently. Make arrangements to hire more staff or hire consultants to help you with some of your responsibilities. Determine whether you will require a larger team in the following year and, if so, budget and plan for it.
10. Examine Your Website, Thoroughly
Your website should not be something that you build and then forget about. This end of year, go through your website and test each link to ensure it works. Send yourself a message via the contact form to ensure that it is operational. Is your website current and up to date? Does it reflect the image you intend your company to project? If not, make a website update a priority for next year.
Planned Growth can help you Assess Your Website’s Needs and bring your website up to date using the latest tools and technology, giving your company an edge over the competition. When was your website designed? It may be time to Refresh Your Website with a newer, more modern look that is inline with your brand and more user-friendly for your visitors. Web trends, technologies and visitors’ expectations change over time, and your web presence should evolve as well so that your website best serves your site visitors.
As you close out this year and get prepared to take on the new year, keep these end of year tips in mind to stay organized and be prepared for the year’s end and the new year’s beginning. Planned Growth is a full-service business marketing firm specializing in growing businesses and assisting business owners in many ways, including social media management, website design and management, CRM (Customer Relationship Management) and automation. Contact Planned Growth today to learn how we can assist your business management and growth. Get in touch with us via our Online Form or call us at 800-625-4769 and let us show you the difference that our team can make for your business!