By the end of the year, small business owners are often overwhelmed with holiday campaigns, closing out books and planning for the new year. Additionally, business owners are tending to their own social affairs during this time. While it is easy for small business owners to forget about tax time during the holiday season, there are important steps that small business owners must take by the end of the year. Taking the following steps can help business owners make the most of the new year.
Assign Employee Bonuses
If you would like to thank employees for a job well-done, consider providing employees with a holiday bonus. Taking this step may help retain strong employees within the company. Additionally, you can minimize your business’ tax burden for the next year. You get to deduct these bonuses from your annual revenue so that you owe fewer taxes in April.
Configure Tax Deductions
At the end of the year, you may be able to take other steps to reduce your tax burden. Consider taking steps that will reduce your overall revenue. For example, you may make investments in office equipment or upgrades, such as improving your technology, purchasing new office supplies and repairing your office. You may also wish to start paying your January bills now so that you can use the deduction on next year’s return.
Assess Your Performance
During the year, small business owners are often more focused on short-term goals than long-term ones. They look at their labor costs, sales and profits. However, the end of the year gives business owners the opportunity to look over their performance for the entire year and to run annual reports, such as a profit and loss statement, cash flow statement balance sheet. If the company has limited profits or issues with cash flow, business owners may attempt to identify ways that they can cut profits, such as changing vendors or downsizing. They may also consider initiatives that will assist them in raising their profit margin.
Set New Goals
The end of the year is the ideal time to set new goals for the future. Be sure that your goals are ambitious but also realistic for you and your team to accomplish. Your goals should be specific and nature and easy to measure. You should also have a timeframe in which you wish to accomplish these goals. You may want to set up a meeting with all of the members of your team in order to communicate these goals on a wider level. You may also want to hire a new accountant at this stage so that you can rest assured that your financials will be in order from the very beginning of the new year.