A young black woman works on a laptop to prepare her small business for the new year

How to Prepare Your Small Business for the New Year

Business Resolutions Start Now

The end of the year is a bustling time for small business owners. Between skyrocketing holiday sales, extended hours, and juggling multiple duties, it can be difficult to find a moment to stop and think about preparing for 2022. 

Where do you start? What metrics can be used to predict and measure success? What steps can be taken to effectively prepare your business for the new year? 

Planning for the new year may seem overwhelming. Xendoo can give you your time back. In this blog post, we will help you strategically chart your path for success, so you can be ready for a new year of growth!

Review Financial Performance

To prepare for the future, take a look at the past year. Analyze your business’s performance from the previous year by reviewing your key financial statements.

  • The Balance Sheet summarizes a business’s assets, liabilities, and equity at a specific point in time. This statement provides insight into cash, inventory levels, Accounts Payable (money owed to others) and Receivable (money owed to the business owner), credit card and bank balances, and the equity in the company.
  • The Profit & Loss Statement outlines the revenue and expenses a business incurred during a specific period, which provides insight into the business’s profitability. It can be used to track and strategically plan for financial trends, such as seasons of high and low demand.  
  • The Cash Flow Statement provides visibility into when cash flows into and out of a business, and how cash balances have changed over a specific time period. It can also be used to project and prepare for the cash needs of the business.

These financial statements illustrate how your business performed throughout the year and reveal hidden opportunities for growth. The best practice is reviewing the financial reports on a monthly basis, as they gauge your business’s financial health and provide insights to timely decision making. 

Click here for more details on the financial statements. 

Forecast Cash Flow and Create a Budget

Cash flow represents the money that flows into and out of your business over time, and is crucial for ongoing business success. For more information on cash flow, click here

Like the financial statements, look at the past to plan for the future. Your cash flow history can be used to create a cash flow forecast, understand and predict upcoming cash needs, and create a budget for the new year. 

Healthy cash flow ensures that you will have the cash you need, when needed.

Understanding your cash needs and budgeting accordingly enables you to meet your financial goals and obligations, and continue to grow your business. 

Prepare for Tax Season Now

The earlier tax preparation starts, the greater the savings will be when tax season arrives. Start by taking a look at your financial statements and tax bills from previous years, which will provide an idea of what will be owed this year. From there, you can start setting aside money to reduce tax season surprises.

Up-to-date bookkeeping allows for tax-readiness throughout the year. Having income and expenses organized will save time and prevent confusion and stress when tax season arrives. 

Lastly, consider partnering with an online accounting service. Get access to an expert team that provides all-in-one bookkeeping, tax preparation, filing, and consulting, so you can make informed business decisions and maximize your savings all year long!

Outsource Your Bookkeeping 

Small business owners cover multiple responsibilities, one of the most stressful and time-consuming of which is bookkeeping. If you would like to take back 4 to 6 hours a month to focus on growing your business, now is the time to outsource your bookkeeping!

An online bookkeeper takes bookkeeping off your plate, so you can spend your time actively working on your business. They also provide monthly financial statements, delivering financial visibility and the actionable insight needed for long-term business growth. 

Online bookkeepers also provide catch up bookkeeping services to get previous years’ books in order. Whether you are behind a few months or years, Xendoo will bring your financials up to date so you can strategically plan for the future.

Spend the New Year with Xendoo

It is time to crush your business resolutions! Xendoo has your back with online bookkeeping, accounting, and tax services. Allow us handle the hassles while you focus on what you love to do: growing your business, all year round!

We would love to get to know you and your business. Schedule a call with one of our online accountants to get started.

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