December is a special month. It’s a month full of snow, gifts and celebration, marking the end of another year. But there is an often-overlooked aspect of the December, January is right around the corner, and with it comes the start of a new fiscal year. In order to make sure your celebration doesn’t end with disappointment, we are going to walk through the most important steps to take to ensure your company is prepared financially for the new year, and that success follows you into the new year. In order to prepare for 2020, stick to the five things on this list:
Review your Internal Operations
The end of the year provides a great opportunity to look at the structure of your business from an accounting perspective. While it’s always important to maintain clean books to show outsiders, ensuring that every department is properly reporting expenses and earnings can help prevent internal fraud and keep your business from going under. If there are any holes in your accounting plan, now is the time to review them to prevent losses.
Get ahead on payroll
Make sure you give your employees any tax forms as soon as possible. Not only will this calm anxious employees, but it will give you space to focus on what’s most important to you – growing your business. Avoiding federal and provincial tax penalties is certainly a plus as well.
Plan for Income taxes
The end of the year is a perfect time to get your taxes in line. For small businesses, this generally involves a meeting with a certified tax professional. To save your company money, and any hidden, unwanted surprises, take care of your taxes now. You will minimize your payments, and help to capture any savings early on, allowing you to get a head start on the competition. It’s important to get a head start, as over 40% of small businesses end up paying some form of tax penalty each year.
Take a moment to evaluate your overall financial health
According to a CB Insights survey, 47% of small businesses listed “ran out of cash” or “pricing/cost issues” as the reason why their small business failed. Lucky for you, both of these problems can be solved with proper accounting. The last thing you want is to be caught in January with no budget for the year ahead. The best thing to do is to review finances at the end of the year and start to plan out a budget. Take time to review your pricing models to ensure you stay profitable in the next year, taking into account your company’s market share and sales volume.
Take stock of your progress
Review your company’s goals and see how its performance stacks up. If you did not set any goals, take a look at your company’s year-over-year and quarterly results to see how much progress you made this year. Now is a great time to start setting goals for the next year as well. Make sure your goals follow the SMART framework – Specific, Measurable, Attainable, Relevant and Time-Bound, and you will find success in the new year. The end of the year can be a stressful time as well as a joyous one. But by following these steps, and seeking advice from accounting professionals like those at Andrews Datax, you can minimize your risk and ensure you start the new year as financially strong as you can be.