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Another year has passed and a new one is just around the corner. As a business owner, you’re probably already reflecting on the past year and thinking about your financial goals for the upcoming one. If you’re ready to set your business up for success in the year ahead, our tax and accounting professionals have rounded up some of the crucial steps you can take to put your best foot forward.
Get your Tax Planning Done Early
Finalize your 2023 tax numbers, prepare estimates, and determine your tax-advantaged strategies for 2024 so you know where you stand financially. Make sure to reach out to your accountant and tax professionals to see how your 2023 growth or changes to your business or tax law may impact your tax planning for 2024.
Build a Plan for the Next 12 Months
Once you close out 2023 and you know where you stand, use the information to help you build a plan for the next 12 months.
Take time to map out all the key dates and milestones for your business in the upcoming year. Include things like:
- product launches
- marketing campaigns
- important financial deadlines
This will help you stay organized and ensure that nothing important slips through the cracks.
Focus on financial reporting and planning
Review your financial performance for the past year and use this information to inform your financial planning for the year ahead. This might involve setting budgets, forecasting revenue, or identifying areas where you can reduce costs. A great place to start is with reviewing your critical accounting reports from 2023 like:
- Profit & Loss Statement (P&L)
- Balance Sheet
- Cash Flow Statement
Take time to settle your accounts and ensure everything is up-to-date as you are closing out your fiscal year. This includes tasks like:
- paying off any outstanding invoices
- reconciling your books
- ensuring that all your financial records are accurate and complete
- completing any necessary audits and required reporting
Need help managing this process? Consider outsourcing your day-to-day accounting or business financial management to the team at SME CPAs. We’re here to help you keep an eye on the critical financials that can help your business move forward in the year ahead.
Perform Internal Audits
Audits are not just for your finances. Take time to complete an internal audit as you’re refocusing at the start of a new year. Performing an internal audit can help you identify areas that need improvement in your operations and accounting practices. By conducting a thorough review, you can spot issues and make changes that will help improve your business’s strategic and financial performance. A bonus – doing this now may also help you prepare for any external audits that might be required this year.
Review and Update Compensation and Benefits
For many businesses, a new year often means no benefits terms, open enrollment periods, and changes to compensation offerings for your team. If you’re making changes in 2024, be sure to review the implications of those changes to your cash flow, as well as, tax liability for the year ahead.
Review and Update your Succession Plan or Estate Planning
Any changes or updates that have occurred in 2023 may have a significant impact on your succession plan or estate planning. For example, if you’ve had any changes in ownership within the business, or if you’ve experienced personal changes like a new marriage or divorce, it may be necessary to revise your plan to ensure that your assets are distributed according to your wishes. Other things that may impact updates to your plan include:
- Updates to tax laws and regulations that may impact your estate planning strategies
- Shifts in the value of your assets or business valuation
- Any changes in beneficiaries or designated heirs
Set Goals and Benchmarks for the Year Ahead
Setting goals and benchmarks are crucial for any business planning, particularly as we look ahead to 2024. Here’s why:
Direction and Focus: Setting goals provides a clear direction for your company and helps maintain focus on what’s important. It ensures that you devote your resources – time, money, and manpower – towards achieving these set objectives.
Measurement and Control: Goals and benchmarks serve as a standard for measuring your company’s performance. They help you monitor if your business is on track or if adjustments need to be made.
Motivation and Morale: Clear goals can motivate you and your team. When these goals are met, it boosts morale and fosters a sense of achievement.
Growth and Success: Goals drive strategic actions that contribute to business growth and success. They aid in decision-making and help you prioritize your actions.
As you plan for 2024, here are a few critical items to consider:
- Financial Goals: These could include revenue targets, profit margins, expense limits, or cash flow objectives. You might also have goals related to securing funding or increasing your business’s value.
- Customer Goals: This might involve expanding your customer base, improving customer retention, or increasing customer satisfaction levels.
- Product or Service Goals: You may have goals related to the development or improvement of your products or services. This could include launching new products or enhancing the quality of your existing offerings.
- Operational Goals: These goals can involve improving efficiency, enhancing productivity, reducing waste, or improving quality control within your business operations.
- Employee Goals: Employee-related goals could include hiring key personnel, reducing turnover, improving employee satisfaction, or enhancing training programs.
- Market Position Goals: These goals could relate to expanding into new markets, increasing market share, or positioning your business as a leader in its industry.
Remember, setting goals is just the first step. Regularly reviewing and updating your goals is equally important to ensure they remain relevant and aligned with your business’s evolving needs and market conditions. Not sure where to start, or looking for a partner along the way? Our CFO Services offer fractional support to growing organizations to provide access and insight from seasoned financial professionals and accountants
Stay Flexible
Maintaining financial health is pivotal for any business, and flexibility is key to achieving this, especially in an ever-changing business landscape. As we look towards 2024, here’s why businesses need to stay flexible:
Economic Uncertainty: The global economy can be volatile with unexpected fluctuations. Being flexible allows businesses to quickly adapt their financial strategies to meet these changes, ensuring sustained profitability.
Technological Advancements: Rapid technological advancements may necessitate investments in new tools or platforms. A flexible approach can help businesses allocate resources effectively to harness these technologies without compromising financial health.
Market Trends: Market trends can shift due to consumer behavior, competition, or regulatory changes. Businesses that are flexible can adjust their financial strategies to capitalize on these trends, creating new revenue streams or cutting unnecessary costs.
Risk Management: Risks can emerge from various sources – operational, strategic, or financial. Flexibility in financial planning helps businesses respond to these risks promptly, mitigating potential financial damage.
Growth Opportunities: Opportunities for expansion or innovation can arise unexpectedly. Financial flexibility ensures businesses can seize these opportunities without straining their finances.
Staying flexible allows businesses to navigate uncertainties, leverage opportunities, manage risks, and ultimately ensure their long-term financial health in 2024 and beyond.
Set yourself up for success in 2024 with SME CPAs
Taking the time to prepare for the upcoming year can help ensure that your business stays on track and achieves its financial objectives. Outlining a tax strategy, updating estate planning, and outsourcing your financial strategy can free you up to focus on growing your business. SME’s team is here to help; if you’re ready to take your financial management to the next level, get in touch with us today. And don’t forget to keep in mind the deadlines for filing taxes – getting your documents into your accountant as soon as possible can help you avoid penalties and interest.