5 Steps You Should Take for Your Business Before the Year Ends
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If you’re like most small business owners, you may already have some end-of-year routine in place - whether that means gathering tax documents or making a plan for the new year.
As you carry out your routine, consider adding these five steps to your to-do list before the year wraps up.
Get Your It Ducks in A Row
No matter how much or how little you work with technology, it’s essential to “get your IT ducks in a row” before the end of the year, says Megan Sullivan in a QuickBooks blog for the accounting software company Intuit.
This includes making sure your data is backed up and organizing your cloud-stored documents.
Check that you have all critical files, including accounting documents, client information, creative briefs, and valuable emails backed up and secure, the blog says.
Also, if you store important data on a cloud-based storage system like Dropbox or Box, it’s a good idea to download “hard” copies and back them up to an external hard drive, the blog recommends.
“The golden rule for data backup is 2:1,” Sullivan writes. “That is, create two separate digital copies, stored in two separate locations, plus one offline copy (preferably stored somewhere else).
Also, before the year ends, she suggests small businesses implement a file-naming system.
“Adopting file-naming conventions across the company is especially important for businesses that share servers that can be accessed by multiple employees,” says the blog. “When everyone follows the same naming conventions, your files stay organized and easily accessible.”
Audit Your Website
If you haven’t done so recently, look at your website from a customer and potential customer’s point of view to see if it needs a refresh.
As a primary component of your sales and marketing toolbox, your business needs to keep its website appealing and relevant as well as easy to navigate.
A refresh might be as simple as updating images and headlines. But if you decide it requires a more extensive redesign, you’ll have the time now to outline a plan for accomplishing that sooner than later.
Consider Deferring Income into Next Year and Incur Expenses
Deferring income into next year can help you reduce your tax liability for the current year, says tax attorney and certified financial planner Brian Thompson.
Another way would be by identifying and paying expenses your business anticipates for early next year.
“However, remember not to spend money on business expenses that you wouldn’t otherwise incur just for a tax deduction,” he writes in a Forbes blog. “Spending a $1 to save 24 cents still costs you 76 cents.”
Update Employee Information
The end of the year is an excellent time to double-check the information you have listed for your employees, including their contact information.
Have them verify their correct phone numbers, addresses, and payroll information, as well as any licenses or company policy compliance documents.
Run A Few Financial Reports
“The end of the year is a great time to assess where you stand financially and how your current financial situation compares to previous years,” advises the QuickBooks blog by Sullivan.
Run a financial report, which typically includes an income statement, a balance sheet, and a cash flow statement. Use your income statement, also known as a profit and loss statement, to look at profit.
“If your profits are lower than expected, you may want to make some changes as you head into the new year,” writes Sullivan.
“If your profits are higher than expected, it might be a good time to make some larger purchases for which you can record future depreciation.”