From Small Business Saturday (November 30th) to the general holiday rush that follows, small businesses are in the midst of an exciting but hectic time of year. That’s a lot of busy people considering there are 30.2 million small businesses (with less than 500 employees) in the U.S., comprising 99.9 percent of all U.S. businesses, according to the 2018 Small Business Profile from the U.S. Small Business Administration.
Though it’s tempting as a busy business owner to view year-end as the finish line to a (hopefully) very successful season, from an accounting standpoint now is the time to start planning for tax season and making goals for next year.
Here are four steps to take during the last few weeks of 2019 to set the stage for a productive start to 2020:
- Evaluate where you are and where you want to be. Conduct competitive benchmarking to analyze your metrics against industry norms and consistently review past business results, trends and ratios against your current operations – adjust processes, expenses and budgets based on the insights you learn from this data.
- Prepare an annual budget. Account for the fixed costs that you can and estimate variable expenses to the best of your knowledge based on percentage of revenue or historical trends. On a monthly (or at minimum quarterly) basis, compare actual results to your budget and adjust accordingly, investigating any major variances and taking the necessary steps to get back on track.
- Start tax planning now. Year-end is the critical time for decision making to mitigate tax paying for the year ahead and to understand the tax liability prior to tax season instead of being unpleasantly surprised. This is especially true as questions linger from the Tax Cuts and Jobs Act of 2017 (tax reform) and as the new Form W-4 is implemented in 2020.
- Don’t make decisions in a vacuum. Consult with your CPA early and often in the planning process. The accountant-client relationship is most beneficial to businesses when it’s advisory versus transaction based.
For decades, The Bonadio Group has supported small businesses through tax law changes, intensifying cost pressures, succession planning and more, offering not just accounting expertise but access to trusted funding sources, lawyers and government assistance programs. Our firm meets businesses where they are now to help them grow into the future with resources for every step of the journey.
Visit https://www.bonadio.com/industries-served/small-business to learn more or contact me directly at sterrigino@bonadio.com to find out how we can help your business prepare for the new year.
This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute, an accountant-client relationship.