By Ralph Miller, Wells Fargo Business Banking area manager
How profitable was your business in 2014? What goals are you hoping to achieve over the next 12 months? These are important questions to ask yourself today, and a financial checklist can guide you through the sometimes overwhelming process. Here are five tips to help get you started:
Develop an actionable 2015 financial plan. From establishing your annual business budget to updating your sales projections, creating an actionable plan with defined business goals will help you stay on target in the coming year. Start by reviewing the list of goals you hoped to achieve in your business at the beginning of 2014 and document your progress. Are you on track to achieve each one? Based on your progress, adjust expectations and forecasts for the year to come.
Review expenses. Check all of your business accounts to make sure you have categorized expenses correctly, and take a look at how your costs compare monthly and yearly. Remember, many expenses are tax deductible, and an efficient expense tracking process will not only save you time but could also save you money at year-end. There are a number of expense tracking tools for business owners available online and through leading banks and financial institutions.
Prepare for year-end tax reporting. Meet with your accountant to review your business profits and expenses, and make adjustments to your budget as necessary. Evaluate your business tax records to ensure that everything is in order, and be aware of tax filing deadlines so you can plan ahead. Now is also a good time to discuss your estimated tax payments and find out if there’s anything you can do to minimize the taxes you’ll owe before the end of the year.
Meet with your banker. It’s a good idea to organize an annual review meeting with your banker to discuss your current business needs and review your accounts. To prepare for this meeting, review your small-business loan accounts to track payment progress, and reconcile your bank and credit card accounts so you can head into the new year in good standing. Also take time to anticipate how your sales goals or hiring plans might impact your need for a new deposit account, loan or line of credit, and be prepared to discuss available options with your banker.
Analyze your business’ cash flow. One of the most important things for a business owner to track is cash flow: how much cash your business earned and how much you spent. If you have trouble maintaining steady cash flow to cover expenses, make sure your financial plan includes specific actions to remedy the issue, such as cost reductions or new revenue sources. Take time to ensure that you fully understand and can forecast cash flow, especially if you have a seasonal business.
Setting aside time now to create a strong financial plan for 2015 is important for every business owner. Visit WellsFargoWorks.com for more tips and guidance that will help you take your small business to the next level.