What were your company’s financial highlights for 2017? Did you obtain financing? Meet all of your payroll, sales, and income tax obligations? Make your sales quotas?
Conversely, did you make any serious financial missteps in the last 12 months?
Whether you had a good or bad year, you can start the clock again in January. Are you ready? Before you plunge into the New Year, make sure you’ll be able to start fresh financially.
Look Backward First
Start by assessing your success in meeting your financial goals in 2017. Were you trying to, for example, keep cash flow positive? Save enough to branch out into a new product or service line? Make room for another employee? Consider how realistic your goals were as you formulate new ones for 2018.
If you didn’t set financial goals, find other ways to evaluate your performance. Did you estimate what your income and expenses would be? If so, review your 2017 budget. That’s the most valuable tool you have as you create your 2018 budget.
If you’re not comfortable entering figures for 12 months, do a budget for the first three. You need to know how much revenue you plan to bring in and what spending limits should be starting January 1. Revisit it at the end of each month to see how realistic it is and—sooner rather than later—fill in the remainder.
Do you have a business plan? Maybe you created one as you applied for a loan and haven’t thought about it since. Think about it now. Use your business plan as you analyze your financial progress in 2017 and get ready for 2018. These documents are meant to be updated based on your company’s constant evolution. If you don’t have one, it’s not too late.
Other Ways to Prepare
While you’re looking back, consider how well your accounting process worked for you in 2017. Are you still working on paper? What kinds of problems did that approach create, and can you resolve to improve your workflow and access to critical data in 2018? While you’re setting financial goals, consider moving to an accounting application.
There are other miscellaneous steps you can take as you prepare for a new year. For example, you should:
- Assess your savings. Could you survive for six months on sharply-reduced revenue?
- Keep a close watch on tax reform. If and when we have new tax laws, they will have an impact on your 2018 tax obligation. Year-round tax planning should start January 1 to accommodate the changes.
- Back up all of your 2017 accounting data safely. Make sure it’s still easily accessible. Consider more than one form of backup.
If some of your year-end accounting tasks get carried over to 2018, don’t panic. We’ll be available to help get your finances in order, whether you need assistance with budgeting, goal-setting, new technology, or simply your everyday bookkeeping. Connect with your MarksNelson professional at 816-743-7700, and we’ll do as much or as little as you want.