As the year draws to a close, many business owners find themselves working hard to wrap up projects, set big goals for next year, and preparing to enjoy some time off for the holidays. Hopefully, you already have your goals for next year set, but if you don’t, please check out my article here with my goal-setting framework.
Carving out some time to perform a few year-end business financial tasks can help you wrap up the year and set yourself up to start the new year ready to go. You’ll feel confident and ready to hit the ground running on your first day back in the office after the holidays.
Find a time you can dedicate to this project, grab a cup of coffee, and let’s get to work!
5 Year-End Business Financial Tasks
1. Evaluate Your Profit and Loss Statement (P&L) - Your P&L is a summary of your business's financial performance. This statement offers a concise report of your business's revenue, expenses, and costs. Essentially, your P&L is a health scorecard for your business. You’ll want to review this report line-by-line and note anything that stands out or if you have any questions. Was your revenue what you projected? Why or why not? Do any expenses surprise you?
2. Analyze Budget - A budget is a plan for every dollar in your business. If you don’t have a budget, the best place to start is by reviewing all of your expenses from the previous year. If you can, go line by line to look for any areas that can be improved. If you already have a business budget, review it to ensure accuracy. Are there any areas that need any additional budget in the next year? Are there areas you can cut back on? Click here for more in-depth support on creating and managing a budget.
3. Review Inventory - Review the inventory of your business. If you have a physical office or storefront and product, that means reviewing all of your items. You’ll want to ensure you’re tracking and documenting your inventory correctly so you know how much you have of products or supplies. If you are a service-based business, this might look like reviewing any office supplies, technology, or printed sales and marketing materials that you have. Does anything need to be updated?
4. Audit Vendor Contracts - Look through all of your vendor contracts and make sure you still agree with the terms and conditions. It might be time to review your current contracts to ensure they are still the best fit for your business. Document any contract renewal dates so that you’re prepared for them.
5. Prep Tax Documents - While taxes aren’t due yet, now’s a good time to start preparing any tax documents or items you need in the next few months. If anything, you can list what documents you’ll need, so you’re ready to download them for your tax preparer. The year’s not over yet, so you’ll have to wait to pull these reports, but it’s good to know what you’ll need. These are some of the financial documents that you’ll need.
Financial Documents:
Sales Records
Invoice Summaries and Receipts
Bank Statements
P&L Statement
Previous Year’s Tax Return (up to 3 years, if applicable)
Let’s Wrap the Year Up with a Bow
You worked hard all year, and now it’s time to celebrate all you’ve accomplished. The goal of performing these year-end financial tasks is to help you wrap up the year and feel confident heading into the new year. If you feel stuck working through these tasks, please seek support. Lighthouse Advisory partners with clients to help them achieve their biggest financial goals. It’s like having your own CFO. Please click here to schedule your introductory consult.
