10/29/2021
With the 4th quarter of 2021 well underway, here's 4 considerations your business should have to finish the year strong:
1. Bringing your books up to date will allow you see how your business has performed thus far in the year, identify any potential problems (i.e. cash flow issues, etc.) or errors and help with the planning process. Using a computerized system such as QuickBooks Online helps make this much more efficient but even an Excel or Google spreadsheet may be sufficient. If you feel this task is too daunting or you don't have the time, then hire a bookkeeper or accountant to do it for you.
2. Review your business performance as compared to your goals. Were you able to reach your sales targets or keep expenses under budget? Whether or not you are hitting your goals, try to understand the why behind the numbers. This will help you make informed decisions over where to invest your time and money.
3. As we are approaching the end of the year, small business owners should be thinking ahead by preparing a 2022 annual operating plan. What are your goals for next year? Do you want to grow your revenue, expand into new markets or launch a new product? Understanding the cash requirements to fund these endeavors and the timing difference between cash outflows and inflows is critical to ensuring the business does not run out of cash. Consider creating a financial model to get a picture of how your plans impact cashflow so banks and investors (including yourself) feel confident putting cash into your business.
4. Preparing for the upcoming tax season now will help you avoid surprises and penalties come April 15th. You should begin tax planning discussions with tax preparer to identify any end of the year tax strategies and preparing your records to help lower your tax bill and stay in compliance.
