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Now is the Time to Perform a Financial Checkup on Your Business

By MarksNelson on November 6, 2017 in Articles, Entrepreneurial Services, Jeremy Smith
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It may seem silly to have a physical from your doctor when you’re feeling fine. Nothing seems amiss, so why spend the time and money?

You know the answer to that: Because symptoms of health problems don’t always announce themselves loudly. You may catch health problems early – before they become medical crises.

Same goes for your company’s finances. Things may seem “fine.” You’re making more money than you’re spending. You’re paying your bills, and your customers are meeting their obligations to you reasonably well.

But like your physical health, your fiscal health may be suffering in silence. Serious financial problems could be lurking beneath the surface. You may be, for example:

  • Behind in your estimated taxes.
  • One step away from a crisis that will require emergency funds.
  • In too much debt.
  • Veering off the charted course your budget prescribed.
  • Overspending in areas that will blow up in the fourth quarter.
  • Underperforming in terms of income compared to last year.
  • Not meeting your 2017 financial goals.

Delay = Crisis

Now is clearly the time for a financial checkup – while you still have time to make corrections before year-end. You might find out that you’re doing better than you thought, and you need to defer some income or make some charitable donations to minimize your 2017 tax obligation.

On the other hand, you may be glad you decided to take this critical step because you’re not doing better than you thought, and you need some catch-up time before the final days of December.

What You Can Do

There’s a lot you can do on your own, most of which boils down to generating reports. If you’re still doing your company’s accounting manually, this will be difficult. Online accounting applications can create them in seconds. You need to know, for example:

  • How much money you’ve already sent to the IRS and state agencies for 2017.
  • How your real income and expenses compare to what you budgeted.
  • How you’re spending your money.
  • How long your supply of cash would last if a major income source dried up.
  • How your inventory is holding up.

Did you define goals for 2017? Now’s the time to revisit them and evaluate your progress before you can think about what you hope to accomplish before 2018. Do you anticipate making any major purchases in the fourth quarter? Can you put together numbers for known—or estimated—income and expenses from now until New Year’s Day?

Don’t Put It Off

It’s critical that you start this process now. Give yourself time to make corrections. Before you know it, 2017 will become 2018, and you’ll have to turn your attention to a new set of numbers. If you have any questions about how to perform a financial check-up or set financial goals for 2018 contact your MarksNelson professional at 816-743-7700.

Bio
Jeremy Smith

Practice Leader