Now is the best time to get your financials in order for the new year!
Create a financially strong 2019 by following these five steps:
1. Get Your Books in Order
Now is the time to catch up on your bookkeeping. The goal is to have your financial records complete, accurate and up to date before you meet with your CPA. They’ll love you for it!
Clean up your 2018 financial records using reliable accounting software (Quickbooks, Xero, etc.). Make sure the chart of accounts accurately reflects how you want to view your business.
Categorize each transaction as income, expense, asset, liability or equity. Input all invoices, bills, business bank/credit statement activity and receipts. You get the picture.
2. Know Your Financial Position
With your financial records in order, you can determine if you expect a profit or loss for 2019.
If profit, how much? Do you need to take a distribution for taxes?
Look at cash flow. How are your receivables? If people owe you money, can you collect it? Also, have you set aside any funds for taxes in a separate bank account?
Decide how much value you can extract in January:
- Contribute to a tax deferred retirement plan (if applicable)
- Report and pay employee bonuses declared in 2018 to your payroll provider
- Reduce outstanding debts
3. Take Stock of Where You Are
Did you achieve your financial goals last year? If not, don’t beat yourself up; just forge ahead. Decide what changes to make in 2019 to help you achieve them.
Also, check in with your personal finances. We want your personal life to flourish as well as your business. Remember, as the business owner, you are the CFO of your whole life.
4. Set Your 2019 Plan
Set specific, measurable, achievable, time-bound goals for the next 12 months.
Reduce the friction towards accomplishing these goals by preparing an action plan that includes the resources needed, total cost and an execution timeline.
5. Evaluate Tax Strategies
Meet with your CPA as soon as possible. Schedule time to discuss your 2018 tax returns and to plan the appropriate strategies for 2019 and beyond.
I plan to take steps 4 and 5 by the end of February.
What steps could you take during the next month to start strong in 2019?
Commit to this goal by replying with your selection. Why did you choose these steps? Do you think that anything is missing from this list? Let us know below.
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