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  • Writer's pictureJordan Silverman

Tips for Preparing Your Small Business for the Financial Year-End

As the financial year-end approaches, it's vital to have your small business primed to transition smoothly into the next fiscal year. Do not wait until December to do this. Q4 should be spent getting ready for next year!

Here, we present a few simple tips to help you ensure your business is financially healthy and ready to thrive in the year ahead.

1. Review Your Financial Statements

  • Understand Your Profit and Loss: Make sure to thoroughly review and understand your profit and loss statement.

  • Balance Sheet Health: Keep an eye on your balance sheet to ensure that your assets equal your liabilities plus equity.

  • Cash Flow: Monitor your cash flow statement to manage your business’s liquidity. This is a great place to see how healthy the business is doing.

2. Budget and Forecast

  • Previous Year's Data: Utilize data from the current year to create a realistic budget for the next year.

  • Seasonal Fluctuations: Be aware of seasonal fluctuations in your business and plan your budget accordingly.

  • Emergency Fund: Build a contingency budget for unexpected events.

3. Tax Planning

  • Consult a Tax Professional: Seek advice from a tax professional to minimize your tax liability. If your accountant cannot help with this ask him/her for a recommendation.

  • Identify Deductibles: Identify potential tax deductibles to save money.

  • Tax Credits: Explore any available tax credits for your small business.

4. Update Records

  • Inventory Management: Conduct a year-end inventory assessment to avoid excess stocking or under-stocking.

  • Account Receivables: Chase outstanding payments and clear your accounts receivable. This goes directly to #1 above and can help with cash flow tremendously.

  • Vendor Files: Update your vendor files to streamline your purchasing process in the coming year. QuickBooks is a great place to have all your vendor details live and be your system of record.

5. Seek Opportunities for Growth

  • Market Trends: Identify new market trends and customer preferences.

  • Networking: Enhance your network to identify potential collaborations or partnerships.

  • Training and Development: Invest in training and development to upskill your workforce.

Closing out the fiscal year strongly positions your business for success in the upcoming year. Following these concise steps will not only help in understanding and managing costs but also in planning for a prosperous future.

Remember, the end of the financial year is a new beginning, and Starfish is here to assist you in making the transition seamless and profitable.

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