Financial New Year’s Resolutions for Small Businesses
Don’t forget to consider your small business’s finances and taxes when making your resolutions this year. Taking the time to review these at least once a year can help you maintain the health of your business year-round. Make this year the year you empower yourself and your small business financially. You need to know where your money is going to know where your business is going. Your business’s finances include more than just tracking your income and expenses. Taking the time to review the financial trends in your business can help shape a more profitable future.
Small Business Financial New Year’s Resolutions Don’t Have to be Big
It takes a lot to run a business and most small businesses begin because of a passion for providing a service or creating a product. Therefore, most small business owners do not have a financial or business background. (That’s why so many entrepreneurs end up on Shark Tank – to get business and financial support for an idea they are passionate about!) Getting organized financially isn’t that difficult – gone are the days of green ledger paper and pencil; there are so many accounting systems for use on our personal desktop, online and now in the cloud!
Changes in your business’s financial planning don’t need to be entire system replacements. Sometimes there doesn’t need to be any change has at all; simply taking the time to review your company’s financial systems can save you money in costs and on your taxes. So what’s a small business owner to do in order to best keep track of their finances? Here are six small business financial New Year’s resolutions to get started:
- Get Organized – Maintaining proper organization is crucial to a small business. Can you produce your income statements? Do you know where the receipts for your expenses are located? What is the gross amount of money your small business has earned over the last six months? You might be able to survive without a financial organization system, but you may never thrive. Hiring a Certified Public Accountant can reduce the stress associated with this process.
- Review Your Financials – Taking the time to review your business’s financials can help guide your future business decisions. For example, taking the time to review your financials will let you know if you can hire a new employee, buy a new piece or equipment or expand your small business in other ways. If you don’t have a tracking system in place, reviewing your bank and credit card statements is a good place to begin. Don’t forgot to organize all those receipts in the shoebox!
- Set Sales Goals – Setting your sales goals for the year ahead can help determine if products and services should be dropped or enhanced, or if you need to raise your margins. During this process you should review the revenue generated by each product and/or service you offer. You would then compare the cost to produce the product/provide the service versus the sales. Then, you can consider working with an accountant to guide you towards your financial goals.
- Update Your Accounting System – Writing all of your expenses down, or keeping them in your head is a system, but not the most efficient method. It takes a lot more time to sort through come tax time and things may be overlooked or forgotten. Accounting software and supporting products are being created and improved more often than tax code gets updated. There are quite a number of accounting programs to take advantage of for your small business. By implementing one of these programs you can save time and money. It will also ensure that you are making effective decisions about your business. Contact your accountant to find out what programs they are familiar with and recommend that will ultimately help reduce your financial stress and make tax preparation easier.
- Update Vehicle Log System – Depending on the number of vehicles and the number of miles you put on those vehicles will determine which vehicle log system would fit your needs best. Be sure to date each trip and include a brief description of where you went and why. For a company that maintains a fleet of vehicles that are used on a daily basis, you will want to use a more robust system. Keeping track of this information will save you time and money when you sit down with your accountant.
- Reconcile Bank Accounts – Reconciling your bank accounts can give you an up to date view of your company’s cash balances, give you an idea of where your money is being spent, and offers reliable financial data. You might even find out you are paying a recurring charge for a service you no longer use! Reconciling your bank accounts is a small business New Year’s resolution that will save you the most amount of money and cost you the least amount of time.
Ludmila CPA is a full-service Reno and Incline Village tax and financial advisor firm. Our experienced accountants have been enabling small business financial prosperity for more than ten years. We enjoy helping our small business clients rise to financial security when we work together. We offer tax preparation, bookkeeping, and IRS audit representation. For your personal finances, we also have Professional Financial Specialists that can help you plan long term.
Keep Your Small Business New Year’s Resolutions with Support from Ludmila CPA
Call us at 775-636-6601 to Free Yourself From Financial Worry!