The approach of a new year inspires hopeful thoughts for the future. Topping the list is an eagerness for financial security, but achieving this requires more than abstract desire. Financial goals are only attainable when one constructs a workable design for the future. Despite uncertainties that may arise, commitment to a few indispensable actions can help your business thrive in the year ahead.
Start Early on Taxes
Perhaps the best protection against uncertainty is starting early on tax return completion. Tax season starts right after the middle of January. By the end of January, you have no excuses for not knowing prior year results.
A commitment to organized financial statements assures that tax return preparation work proceeds smoothly and is completed early.
Your accountant will likely have some annual bookkeeping adjustments for tax purposes. You only need to have the books in order that summarize ordinary day-to-day results of business operations. You should be aware of key elements such as total revenue, totals paid for each business expense category, and year-end asset and liability balances. Make sure your bookkeeper has enough information to reconcile the books to financial institution statements for bank accounts, credit cards, and loans.
Tax returns have deadlines. Long before the due date of your income tax return, you want to know the amount of any tax you owe.
Commit to Financial Evaluations
Maintaining reliable financial records throughout the year allows you to monitor business performance. Conducting regular self-analysis assures you’re on track for achieving your objectives. Be sure to plan for devoting time next year to recurring examination of business financial statements. This is the only path to quickly resolving any omissions or errors.
If you’re not sure how to interpret the business financial statements, professional accounting help is all you need. An accountant can summarize income from various products or services as well as describe where the money is being spent along with spending trends. Armed with this information, you can make optimal decisions about directing your time and other resources to maximize profit.
Reduce Business Expenses
A surefire way to increase business profit next year is to reduce expenses. Revenue can remain unchanged while the bottom line improves simply from lower costs. Resolving to save a fixed amount is too abstract. The better resolution is determining a precise expenditure target.
A cost-reduction goal may seem small, but it adds up over the course of a full year. Lowering a recurring monthly expense by $20 puts an extra $240 in your pocket. Since $20 isn’t much, select a few categories for this savings. Reducing the monthly cost for insurance, telephone, and internet by $20 each delivers a $720 annual savings. This means a lot to a small company. Even a large enterprise strives for this amount of profit increase, because it’s enough for a loan payment on a large amount for expansion or upgrades.
Completing your tax return early, committing to regularly scheduled financial statement examination, and continuously checking up on specific cost-reduction goals are resolutions to keep for success throughout the new year.