Closing your books of account on an eventful year can be a daunting endeavour, but it shouldn't be so. While it’s tempting to get caught up in the euphoria of the winter holidays, there’s also no better time to get your finances in order, setting you and your business up for a stress-free holiday season and successful new year.
Here are 3 important tasks every entrepreneurs should prioritize to jumpstart their end-of-year accounting:
In an ideal business world, transactions would be meticulously recorded and would align with external statements received from financial institutions. With that said, mistakes do occur and, as a result, need to be adjusted accordingly. Reconciling your accounts will not only keep your records accurate, but will also flag any financial inconsistencies like fraudulent activity, mischarged transactions, or unused subscriptions, etc.
These real-time, accurate insights can provide you with a more holistic picture about your business’ overall performance. To make your life easier, make reconciling your accounts on your mobile device a daily habit – whether it’s the first thing you do over a morning coffee, or the last thing as you head out at the end of the day.
COLLECT OUTSTANDING PAYMENTS
The waiting game is never an enjoyable one and neither is the chasing that ensues. Here is an opportunity for technology to ease the effort required to encourage your clients to complete their payments, while also getting paid faster. Accounting softwares like Xero, Sage50, QuickBooks,etc exist to simplify the lives of entrepreneurs, bookkeepers, cashiers and accountants alike.
Some features like online invoicing can make collecting payments for accounts receivable increasingly accessible to clients, as long as they have a the device and internet connection. Automated invoice reminders can also reduce the effort needed to play ‘catch-up’, while helping enforce a friendly and timely collections policy. You can ensure your business’ cash flow is healthy and in good standing by keeping track of outstanding payments.
REFLECT ON YOUR GOALS TO MAKE NEW ONES
By projecting your finances, you are laying down the foundation to plan and budget for your business in the new year. There are three basic financial documents necessary to ensure your financial projections are sound, they are: an income statement, cash flow statement, and balance sheet.
These projections will serve as a standard to compare against your ongoing financial performance. You’ll notice if your business is falling short or if it’s exceeding your expectations throughout the year in view. While setting financial goals are a given, make sure to give some thought to your professional and client goals too. Consider how you are enabling professional development in yourself and your employees, and if the resources you have in place are inducing tangible benefits.
Don't forget to review your current client partnerships to see if they still align with your business goals, objectives and values.
The countdown to the winter holidays is officially on, and the sooner entrepreneurs close their books on this year, the sooner they can establish achievable financial goals for next year.