The New Year is seen by many as a time for starting over, beginning with a clean slate, and getting things right. This can be as true with finances as with anything else. Even small business finances can use a little tune up at the beginning of the year. Below are five tips that take only a little time but can make a big difference.
Review and Set Goals
The first thing that should be done either just after or going into the New Year is a review of the financial state of the company. As you do this, set goals in accordance with the results of the review. Consider the following when taking it all in:
- How does debt look? Can you cover it? Is there room for more if it is profitable? Do you need to work on digging out?
- How is cash flow fairing? Is it stable or does some tweaking need to be done to get it where it needs to be?
- What kind of growth potential is there for the coming year? Can you afford to finance a new building or other growth project? Do you need to?
After making these considerations, set some goals. Do not set broad, random, and hard to measure goals, but rather set specific goals. You want to be able to see clearly when they have been met.
Open Your Mail
You know how you always get those credit card statements and bank statements? You know how you always send them to your bookkeeper unopened? Don’t do that. Unless you are saving the final bank statement and keeping it sealed for audit purposes, which can be done by your bank, open up those statements and look at them before sending them on their way. You need to have a handle on what looks normal so that you know when something does not look normal. Of course a good bookkeeper will keep you informed, but not all bookkeepers are honest, and the best protection you have is your own knowledge. Make looking at your statements a New Year’s resolution.
Prepare for the “Fiscal Cliff” Tax Hikes
Unless Washington comes to an agreement, we are all about to fall off of what has been dubbed a “fiscal cliff.” Among other things, several tax hikes are set to initiate that affect pretty much everyone in the country. They include increases in:
- Federal income taxes
- Capital gains taxes
- Estate taxes
Do not go into 2013 oblivious to these. It may not happen, but prepare for the worst and hope for the best is definitely the best course of action here. Make cuts where you can and increase revenue where possible so that you can handle the increase in tax expense.
Give, Give, Give
Okay, so this is really not for after the first of the year, but it is a way to prepare. It is also wise advice for any new year, not just this one. Give as much as you can now, and take advantage of the tax benefits of that giving. Doing so can reduce your tax expense, and as much as next year’s may hurt, take every opportunity to cushion yourself now.
Consider Projects that May Be Financed in the New Year
As briefly mentioned before, the New Year is a great time to consider planning for upcoming projects. If something needs to be done, and doing it will be profitable, get it scheduled. Financing a new building or anything else, if it will result in more income is a wise growth move. Biz2Credit can help in such cases.
Debt is not always bad. Do consider alternative lenders in addition to the traditional banks and credit unions. They often offer better products, faster funding, and terms for small business loans than the traditional lenders do. They are also often more aggressive when it comes to supporting small business growth, with bodes well for small business borrowers.
New Year’s Day is coming. Don’t let it come and go without making some positive changes. Whether you take all of these to heart or only a few, any move in the right direction will be a good thing for your business.
This article was submitted by Faith Stewart. Faith Stewart has a BBA with a major in accounting and spent 10 years working in the various aspects of accounting and finance before pursuing her passion for writing.