Kickstart Financial Success: Your Annual Checklist

Prioritizing financial wellness is essential for the vitality of any small business. Keeping your finances organized and healthy ensures stability and prepares your business for future growth. We’re excited to share a comprehensive annual financial wellness checklist, designed to guide you through key financial processes and help set your business on a strong foundation. In this article, we will cover:

• Year-End Review & Reconciliation

• Budgeting & Forecasting

• Risk Management & Legal Structure

• Cash Flow & Profitability

Want to learn more? Connect with a Portland Office of Small Business liaison to explore what assistance is available!

Year-End Review & Reconciliation

Closing out the year accurately is crucial. Here’s what to focus on: 

• Finalize year-end books: Make sure all income and expenses are accurately recorded and properly categorized. 

• Reconcile all accounts: Align bank statements, credit cards, and loans with your accounting software such as QuickBooks or Xero. 

• Review and adjust inventory: Conduct a physical inventory count to accurately assess asset values. 

• Manage accounts receivable (AR): Follow up on outstanding invoices and evaluate whether any uncollectible debt should be written off. 

• Settle accounts payable (AP): Confirm all bills and liabilities are fully documented and addressed. 

• Prepare for tax filing: Gather all necessary documentation to ensure a smooth and timely tax filing process. 

Budgeting & Forecasting

Lay the groundwork for next year’s financial strategy:

• Analyze performance: Compare last year’s actual results with your budget to identify and understand variances.

• Create next year’s budget: Develop a detailed and realistic budget for the coming year, using past data and future goals.

• Develop sales and revenue forecasts: Project achievable sales and revenue figures, accounting for market dynamics.

• Review pricing strategy: Ensure your pricing remains competitive while supporting profitability.

• Stress-test the budget: Plan for possible setbacks, such as a 10% drop in sales, by having a contingency plan in place.

Risk Management & Legal Structure

Protect your business against potential pitfalls:

• Review insurance policies: Confirm that your coverage is comprehensive and up-to-date.

• Evaluate debt structure: Look for opportunities to refinance or consolidate loans, aiming at reducing high-interest debts.

• Reassess business contracts: Examine contracts for favorable terms and upcoming expirations.

• Review legal entity status: Ensure that your legal filings, whether as an LLC or Corporation, are up to date and compliant.

• Build an emergency fund: Maintain cash reserves to weather unexpected downturns, ideally covering several months of operating expenses.

Cash Flow & Profitability

Strengthen cash flow and improve profitability:

• Assess profitability: Identify your most and least profitable products/services using accounting reports.

• Optimize payment terms: Work to speed up accounts receivable processes and strategically manage accounts payable timelines.

• Review expense categories: Identify and eliminate unnecessary costs by analyzing each expense category.

• Plan capital expenditures: Strategize necessary investments in equipment, facilities, or technology to support growth.

Ready to take control of your financial future? Let’s ensure your business thrives with confidence and precision.

Until next time, keep thriving and stay financially savvy!