As hard as it is to believe, fourth quarter is well underway, and that means it’s time to start year-end tasks and planning. It doesn’t have to be painful—as a matter of fact, when 2017 arrives, you’ll be glad you took care of this end of year to-do list.
• Know where your business stands now so that end of year figures won’t be a surprise.
It’s important to have a Profit and Loss report to tell you how much you’ve taken in and how much you’ve spent year to date. It provides a good starting point for estimating taxes as well as a look at where you’ll start 2017 financially.
Other reports you’ll need for a total business picture include:
• Accounts receivable—reconcile now to improve EOY cash flow and get a clean start in 2017.
• Balance Sheet —take a look now to get a big-picture view of how your business performed financially throughout the year. This report shows your business assets, liabilities and equity.
• Income Statement—gives you an at-a-glance itemization of your revenue and expenses, resulting in a profit or loss, year-to-date.
• Cash Flow Statement—shows where the money has gone and where the money came from. Is there a net increase or decrease in your business’s cash flow year to date? This information will help you plan wisely for 2017.
• Do some end of year tax planning before end of year.
Don’t make the mistake of thinking taxes are a once a year, end of year thing. If you do, you could miss the chance to make any meaningful changes to improve your business’s tax situation. Set up a meeting now with your accountant before the year comes to a close, so you know what you need to do to close out 2016 to your tax advantage. This is also the opportunity to look at your estimated tax payments for the year and get caught up if needed.
Take this time to go a little deeper and evaluate your current tax strategies with your tax expert. This will enable you to Investigate different tax strategies that may be new, available due to a new business situation, or because of your 2016 financial position.
• Consider how your business got where it is and how to get where you want it to be.
Review your 2016 business plan and goals. Did you hit some of the marks but not all? Consider your—
• Total number of clients or customers
• Revenue year to date
• Profit year to date
• Monthly revenue growth rate
Then, during Q4, meet with the right people on your team, plus any professional partners, to make notes, set priorities for the remainder of the year, and to tweak or totally revise your 2017 business plan.
• Start 2017 by looking at 2022.
If you’re feeling extra energized by the brisk fall air, project out five years then work back into 2017. For instance, if you want to work toward a $10 million per year sales volume by 2022, what figure will you need to hit in 4 years? 3 years? And so on? What starting steps are necessary in 2017 to reach each of those annual marks in order to get to $10 million in sales volume in the next five years?
Attending to year-end financials, planning and reports now will alleviate panic and after-the-holidays stress. So let us be the first to wish you a Happy New Year! May your 2016 end well and your 2017 get off to a great start!