With the end of the 2016 fiscal year around the corner, many deadlines will need to be met while also managing the company towards success in the new year. Communication and organization will be critical for managing the end of 2016 and the beginning of 2017. Starting with these four tips you can help set up your company for financial success.
1) Set a timeline for important deadlines
It is vital to properly manage your business strategies by setting key dates to complete your year-end financials. Items that need to be completed by this date include forecasting for Q1, verifying employee data which can include PTO, sick pay, or bonus information, and ensuring all 1099 information is on file and ready to go.
Ask yourself, will the audited financials? When is the tax return due? Does your CPA offer a discount for preparing the tax return early? When will we send out the 1099-MISC out to both individuals and the agencies (the deadline is January 31, 2017)? Stay on top of these questions and stay organized.
2) Implement a budget for 2017 that is reflective of realistic goals
Creating a list of goals as a part of your financial planning is a successful strategy for small businesses to follow. To bring these goals to fruition, establish a budget for 2017 prior to January 1st so that it is ready to be used immediately. Be mindful of the company’s historical growth and make sure that your goals are realistic so that you do not set your business up for failure. What profit margin is desired for 2017? What growth do you expect to achieve for your business? How much do we want to increase our bottom line? Answering these and other questions with well-defined goals will set you up for success. Utilizing a fully implemented budget will keep your company on a solid path and will act as a health check-up each month when reviewing the financial statements.
3) Prepare a 90-day cash flow forecast for Q1
Start your 2017 off right by preparing a cash flow forecast for Q1. By doing this, you will be able to better manage cash flow which is a key aspect of financial management. If you don’t forecast accurately, your could risk missing a payroll or not have the money to invest in key areas that could help you grow your business. If cash is going to be tight, start looking in to financing options. This is especially important for small businesses and start-ups since they are most susceptible to cash flow issues and need to make sure they have enough cash flow to ensure the company stays afloat. If your company is in its infancy, proper financial planning and forecasting is key to your success.
4) Perform any bonus calculations for your staff
Calculate a bonus budget. The bonus budget is the amount of cash your company is ready to pay your staff above and beyond regular payroll. You will need to determine how the bonus will be paid out to the employees. Each employee typically receives a portion based on the length of service to the company, the employee’s position and other factors, but there is no set rule for bonus issuance. Bonuses can be paid out in one lump sum, or can be paid in monthly installments. Once the amount is determined, be sure to have the amount accrued into the 2016 financials.
These are just a few tips Pro Back Office can offer your business.
If you have questions for the PBO team, please email us at firstname.lastname@example.org or 858.622.1681.