By Dejan Ilijevski
As we prepare to say goodbye to 2024, it’s time for small business owners to take a comprehensive look at their financial situation. You can discover opportunities for development, obtain important financial insights into your company’s performance, and make well-informed decisions for the following year by conducting a thorough end-of-year financial review.
Preparation is key to creating a clear picture of your business finances and business goals. To help, I’m sharing this end-of-year checklist to guide you through the essential tasks involved in a productive end-of-year financial review.
1. Review Your Finances
A good place to start is to take a look at your complete financial picture. Checking off the following tasks gives you valuable insight into your company’s financial well-being and helps you make informed decisions for the upcoming year.
- Examine financial records: Examine your cash flow, balance sheet, and income statement to determine the overall financial health of your company.
- Analyze profitability: Review your profit margins and pinpoint areas that require attention.
- Evaluate cash flow: Verify that you have enough cash on hand to cover your operating expenses and prevent cash-flow problems.
- Review trends: Examine your financial data to find any patterns or trends that could have an effect on the future of your company.
2. Prepare for Taxes
Now that you have a better sense of your overall finances, as a small business owner, it’s a smart time to prepare for the upcoming tax season. Complete the tasks below to better optimize tax deductions and mitigate your tax liability.
- Assemble the required paperwork: Gather all your financial documents, including expense reports, bank statements, invoices, and receipts.
- Examine your tax deductions: Consult with a tax professional to verify you’ve optimized your tax deductions.
- Calculate your anticipated tax liability: To prevent penalties, calculate your estimated tax liability.
- Think about tax-saving techniques: To reduce your tax burden, explore options like charity gifts or retirement contributions.
3. Close Year-End Procedures
Next, verify the accuracy and completeness of your financial records by finalizing year-end procedures. Accomplish the tasks below to help prepare your business for the upcoming year and avoid potential financial snags.
- Close accounting books: Confirm that all transactions are recorded and properly categorized.
- Account reconciliation: Verify that the information in your accounting records matches your bank and credit card statements.
- Update the inventory: To reconcile your inventory records, do a physical inventory count.
- Get ready for audits: If necessary, verify that your company is ready for upcoming audits.
4. Plan for the Next Year
Now it’s time to plan for the upcoming year. Position your business for growth and profitability in the new year by finalizing the items listed below:
- Establish financial goals: Set specific, measurable financial goals for the future year, such as increasing revenue, cutting costs, or boosting profitability.
- Establish a budget: Create a detailed budget to guide your financial choices all year long.
- Examine your insurance policy: Verify that the insurance you have is sufficient to shield your company from any threats.
- Make an investment plan: Explore ideas for other investment options or opportunities to reinvest in your company.
Reach Out Today!
Getting ready financially for a new year as a small business can be complex. But devoting attention to the future of your business not only helps you end the current year on a positive note, but also sets you up for profitability in the new year.
SCM Investment Services has the knowledge and experience to guide you on your journey toward a confident financial future for your small business. We can help you track your progress toward improving your financial health, increasing your net worth, and realizing your goals.
Are you ready to make the most of your financial journey? You can schedule a complimentary introductory meeting or request a free financial health checkup by calling (219) 225-1934 or emailing dejan@scminvesting.com.
About Dejan
Dejan Ilijevski is Financial Advisor, Investment Manager, and Founder of SCM Investment Services, an independent, fiduciary, fee-only financial advisory and investment management firm based in Lake Elmo, Minnesota. With an evidence-based approach to investing grounded in economic theory and reliant on insights from financial science, he customizes globally diversified portfolios of mutual funds and ETFs for his clients. With 20 years of experience in the trading/financial services industry, and described as trustworthy and community-oriented, Dejan is passionate about helping individuals and families, prioritizing their best interest first and foremost.
Originally Dejan pursued a career in research and technology but was recruited by a startup trading firm at the Chicago Board of Trade. He took advantage of this rare opportunity, curious to learn more about capital markets. Dejan’s technical background provided a unique skill set, and by the end of his rookie year, he routinely transacted over $1 billion in U.S. Treasury notes daily, making him one of Chicago’s biggest bond traders. He consistently earned the highest profits for the firm for many years and continued to advance professionally in the trading arena.
With newfound experience and insight, Dejan came to realize his parents were being exploited by their financial advisor and that the financial services industry does not work in your best interest. After earning his MBA from the University of Chicago Booth School of Business, Dejan left the trading industry to start an independent financial advisory firm based on integrity and transparency and built on the belief that everyone deserves trusted, knowledgeable financial advice—blending Wall Street expertise with Main Street values.
Serving the broader community as an investor advocate, a proponent for financial literacy, and sponsoring nonprofit initiatives, Dejan is a trusted subject matter resource for many financial news media publications. He and his wife, Daniela, reside in Munster, Indiana, with their two kids. In his free time, he enjoys road cycling, reading, playing soccer, traveling, going on adventures (even skydiving!), and serving local charities. To learn more about Dejan, connect with him on LinkedIn.
