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May 13, 2022 | Posted in:

Financial Spring Cleaning for Your Business

Conducting an annual review to improve your business can help facilitate growth, streamline bottlenecks and propel you into the year ahead. Here are some ideas to get your business into the best shape ever heading into the summer:

  • Tidy up your inventory. Consolidate and reorganize your inventory to create a more logical flow and to reduce storage expenses. Now is a good time to create a plan to remove expired and slow-moving items you identified at the end of the year.
  • Streamline your facility. Besides the usual dusting and activities to help you declutter, consider organizing and purging hard copy files, or moving toward a digital document retention plan with system backups. Define what your business needs are now, as well as over the next few years, to help you plan for growth.
  • Clean up your financials. Take a look at your balance sheet. Are there prepaid expenses that were really expensed and consumed over a prior period that need to be cleaned up? Do it now. Other balance sheet items ripe for review are the allowance for bad debt and unearned income accounts. Review the rest of your financials to determine if you have the appropriate level of detail to make sound business decisions. If not, add new accounts to provide better visibility.
  • Improve business performance measurements. If you haven’t already, consider building a dashboard of key financial ratios to provide a snapshot of business performance throughout the year. Figure out what key metrics to measure to track your business’s success. How do they compare to the industry benchmarks?
  • Update your permits and licenses. Conduct an annual review of your current and expired permits and licenses. If you aren’t sure what you need, try contacting your local government or an online legal filing service to help you get started.
  • Confirm employee vs. contractor status. Should a worker receive a 1099 or a W-2? Understanding the classifications for each type of worker is critical to track and report their payments. If you need to make a change, do it ASAP. Create guidelines to keep your business relationships on the right track.
  • Review and refresh your policies. Review your policies to find gaps that are not addressed with your current employee and company policy manual. This may involve researching best practices for a business your size and in your industry.
  • Check on vendors and services. Consider updating vendor information and cleaning up any outdated vendors in your system. It’s also a great time to evaluate your expenses and consider if you can get better pricing for things like utilities and shipping, or if you really use the services you’re auto-paying for with your business credit card.
  • Make a tax-record retention plan. Implement a process to identify and organize tax-related records as they come in throughout the year. Also, ensure you have all of your past years’ files for easy reference should you need them.
  • Identify tax savings. Make tax planning a habit for your business. Create a financial and tax calendar to reference throughout the year. This simple technique can help you provide ample time to create a thoughtful plan to reduce your tax burden.

By focusing your time and energy on just a few of the ideas above, you will improve your business operations and time spent on inefficient tasks during the height of your busy season. Call if you have questions.

 

Spring Cleaning Your Business Finances

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