As a small business owner, there are three important things you need to do before December 31. These three things will provide you with the necessary information to make informed business decisions and make the most of 2016.
1. Get caught up on your bookkeeping
You can’t make any sound financial or tax planning for the future if you don’t know where things stand—and that means understanding actually how much you’ve taken in and how much you’ve spent year to date. By getting caught up on your revenue and expenses now, you will have an easier time come tax season, and you’re in a better position to make sound end-of-year decisions.
2. Revisit your pricing
Once you understand your business’ financial picture, it’s time to get honest about how things are going. Is your business model sustainable or do you feel like you’re working as hard as you can, but still treading water? Many freelancers and small business owners make the mistake of undercharging their clients: is your pricing adequately compensating you for your time, experience, and costs? The start of the New Year is a natural time to revise your rates.
3. Do some end-of-year tax planning
The majority of people think about taxes just once a year. As a result, they lose the chance to make any meaningful changes to help their tax situation. It’s smart to have a chat with your accountant before the year comes to a close, so you can follow any tax advice while it still matters for 2015. For example, if after organizing your books, you realize that you’ll have a larger-than-expected profit this year, consider purchasing a new computer or other expenses you’ve been considering. And by all means, see where you stand with your estimated tax payments for the year and get caught up if needed.
If you don’t have the time to finish the bookkeeping for your small business, get in touch to chat about how we can help.