Another year has come and gone in the blink of an eye. Now is the time, as the dust begins to settle amidst a busy holiday season, to make sure that you’ve checked off the important items on your end of year to-do list. Here are a few important items not to be forgotten as we wrap up the old and ring in the new:
Pay your contractors & vendors. As your cash flow allows, pay off current invoices and prepay anticipated January bills before the end of the year. Front loading some future bills can help reduce your 2020 tax bill by adding to your deductible expenses.
Compare your balance sheet and profit & loss reports to your budget and forecasts. See where you did well – and where you didn’t. Make sure to adjust these numbers for next year. Do you plan to grow one area and cut back on another? Put it down on paper so you can track your progress.
Review your insurance coverage and rates. Make sure that you are getting the protection that you want and need, at a price that fits your budget. Never be afraid to shop around and see if you can find the same (or better) coverage for a lower rate.
Make charitable contributions and capital expenditures. Donating to a local charity and purchasing new equipment are both great last minute ways to reduce your tax liability when you file for 2020. So if your equipment needs an upgrade or you need a new company vehicle, don’t wait!
Meet with your accountant. Don’t put off meeting with your accountant until the new year. Make time to sit down with them and review your financials from 2020. Then take a look at your forecasts for 2021 and let them help you validate your plan. Your accountant can help identify future areas to grow revenue, improve cash flow, cut expenses, and save on taxes.
Review your client list. Whether you use a simple spreadsheet or software like Salesforce to manage your customer database, it’s important to review annually to make sure that your clients’ contact information is up-to-date. And since you’ll already be in there, why not take the time to send your clients a holiday card or thank you note for doing business with you in 2020?
Start or contribute to a retirement plan. If you don’t already have one set up, now’s the time to look into creating a retirement plan for your business. Traditional 401(k) plans are often too costly for small businesses, so that may not be an option. But even small employers have a few different options to look at, including a SIMPLE IRA, Safe Harbor 401(k), and a Self-Employment 401(k) – to learn more about the different options, talk to your accountant or financial planner to learn what will be best for you, your employees, and your business.