Most of us are all too happy to say goodbye to this bizarre year 2020 while remaining cautiously optimistic that 2021 will be better. To ensure your business makes the smoothest transition possible into the new year, here are some tasks you should consider doing before year’s end.
1) Meet with Your Accountant, Bookkeeper or Accounting Staff
Whether you have an entire accounting staff, part-time bookkeeper, or contract with a third-party service, it’s a good idea to meet with them, either in person or virtually, in early December. Take the time together to review financial statements, ask questions, gauge your company’s financial position, and find out if there’s anything you can still do to improve your tax situation for the current year. If you have time, you should also review problem customer accounts and come up with a strategy for how to work with them to get paid. While meeting with your accounting professionals, take advantage of having their full attention and see what other advice, recommendations, or thoughts they may have for you on how to improve your company’s fiscal health.
2) Conduct End-of-Year Employee Reviews
While it’s not a must, the end of the year can naturally be a great time for you or designated managers to meet with employees to go over their performance. This is especially relevant if your company gives end-of-year bonuses tied to performance. It can also be a great way to personally deliver any kind of holiday gift or bonus. When you meet, go over the things each employee is doing well first and then provide constructive criticism about areas where they could potentially do better. This is the perfect time to gauge how interested they are in remaining with the company long-term and how amenable they might be to training for or moving into other roles at your company in the future. Also encourage them to give feedback about things you and management could be doing better.
3) Take Advantage of Last-Minute Tax Saving Strategies
Your accountant or tax professional can give you specifics for your situation, but the end of the year can be a great time to lower your tax debt for the year. Some common strategies for doing this include donating to charity, purchasing supplies and equipment that can be quickly put into service, and delaying income by invoicing late for recently sold products and services so payments aren’t received until next year.
4) Reflect on Accomplishments Achieved Throughout the Year
Regardless of the how bad this year was, you and your business have made it through. Sometimes challenges make us stronger and can improve our businesses too. Spend a few minutes reflecting on the year and jot down things that your company did particularly well. Think about them and then determine if there’s anything you can learn from the experiences or outcomes. You might even find a few things worth celebrating.
5) Complete an Inventory Audit
The end of year is the ideal time to audit your company’s physical inventory of everything from raw materials and finished products to office supplies. You may also want to audit and value your equipment to decide which machinery is likely to need upgrades or replacement in 2021.
6) Save and Store Reports, Documents and Data
Hopefully, your business already has a data management plan in place for securely saving and storing important reports, customer information, and other documentation. If not, be sure to manually back up the important data that you may need later. If third-party accounting or IT services handle your documentation, be sure that you know how they store your data. If you like to have hard copies on hand of important documents, the end of the year is the time to go ahead and print them out and store them some place where they’re protected from fire and other disasters. Losing important data and documentation necessary to run your business or required to have on hand due to regulations can be disastrous to any business.
7) Set Goals for the New Year
Setting clear goals and expectations is closely tied to both personal and business success. Take the time now to make a short list of new year’s resolutions or some personal goals you’d like to set for yourself in 2021. Then create a list of goals for your business. To hone your list and ensure your business goals are realistic, loop in your management team or key employees.
