Small Business Year-End Checklist – Get Ready for 2022
The end of the year is often seen as the perfect time to reflect and plan for the year ahead. But the reality for most business owners is that it is crowded and that might seem like all you can do to get by.
While you may not have much time for quiet reflection, do your best to try to set aside time for yourself so that you can review where your business has been and where you want it to go over the next year. new Year.
Here we offer a year-end financial task-focused checklist to help your business finish the current year with confidence. Use what you learn to set goals and create an action plan for a successful year ahead.
You don’t have to check off every item in this list; pick the ones that are most important to your business and do what you can. Just keep in mind that the things you want to do the least might be the things you really need to do first.
Sales that generate profit are the number one way to build a financially successful business. So start by looking at how you generate sales. Remember, however, that income will not equal profits unless your inputs (income) are greater than your outputs (expenses).
- Review your business plan to make sure it is up to date and reflects your goal for the coming year. A business plan should be updated as market conditions change, and if there is a time when conditions have changed this year, it probably is!
- Review your marketing spend from the previous year to assess what worked and what didn’t. Not all types of marketing let you track specific results, but many do.
- Consider eliminating marketing spend that doesn’t provide a positive ROI (return on investment). Of course, there may be other reasons to invest money in marketing, such as supporting your community, but if you are spending a lot of money on a particular marketing or business strategy and you are not seeing results , maybe it’s time to cut your losses.
- Evaluate your budget to determine how much you can spend to test new marketing strategies and enter new markets. (In 2020, this was called “pivot.”) There are more ways than ever to reach an audience, so consider placing small bets to find what works.
- Investigate the export. If there is an international market for your goods or services, you can benefit from expertise and even funding through SBA programs and resource partners.
As they say, the numbers don’t lie. Recognize that bookkeeping isn’t just important for filing a tax return or making sure you pay as little tax as possible to the IRS or your state. Whether you love working with numbers or hate them, what you learn by digging into the numbers will help you make important decisions for the future.
- Most important: make sure your accounts are up to date. If you do it yourself but are consistently late, it may be worth hiring an accountant to keep your financial records up to date. Each month and at the end of the year you will want to be able to “close the books”
- Determine if you want to continue using the same accounting software next year. (Quickbooks are very popular, but there is plenty of accounting software that small business owners can consider.)
- Examine financial statements, including your income statement, balance sheet, statement of cash flows, and income statement. If the idea of this task makes your eyes glazed over, enlist the help of your professional accountant or business mentor.
- Run an accounts receivable age report and determine what actions you might need to take to encourage slow-paying customers or customers to catch up. Early payment discounts or slow payment penalties can both be effective.
- Run an accounts payable report to see if your business is meeting its obligations on time. Late repayments can hurt your business credit.
- Arrange a consultation with your CPA or tax preparer to review your financial reports, save on income tax, and discuss ways to improve your business finances. Don’t wait to have this conversation until tax time when they are overwhelmed.
Most business owners prefer to do more than just financial matters in their business. Most would probably prefer to spend time creating new products, selling, or even finishing work for customers. But if you’re not really careful with your finances, you’re probably wasting money.
- Review the business credit cards you’ve used in the past year and determine if it’s time to shop around for a better deal.
- Revise your pricing strategy and consider increasing the prices / tariffs.
- Criticize your business bank statements like a lender would, looking at your average monthly income, low balance days, and sources of income, all of which can impact your ability to qualify for small business financing.
- Evaluate your business bank account, including fees and benefits, to determine if it is still right for you. If you are using a personal account for a business, create a business bank account.
- Review business expenses to identify costs that you can eliminate. Remember to ask yourself what kind of ROI you are getting on these expenses.
- Take out a line of credit if you don’t have one. Whether it’s a crisis or an opportunity, you’ll be happy to have access to this essential type of short-term financing when you need it.
- Review your current business loans to determine if you can save money by refinancing business debt or consolidating business debt.
- Shop around for the new financing you will need in 2022. Buying a loan before you desperately need the funds will allow you to make better decisions.
- Examine contacts with vendors and suppliers; consider negotiating longer payment terms to improve cash flow. Or, when, possible tax benefit from quick pay discounts.
- Check your professional and personal credit reports. Credit will play a role in many financing decisions, and good credit can help your business save money on insurance or open up other business opportunities.
After weathering the pandemic crisis, natural disasters across the country, and increased reports of cyber ransom attacks, most business owners are well aware of the need for business insurance.
- Review your insurance coverage to make sure it still meets the needs of your business.
- Consider purchasing purchase insurance for savings.
- Discuss coverage with your insurance agent to eliminate any gaps in coverage.
- Explore insurance to help your business survive a cyberattack or data breach.
Finally, don’t forget to take the time to recognize your accomplishments and those of your team. The fact that your business has survived this tumultuous year is reason enough to celebrate. Savor your successes and prepare for an even better year in 2022!
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