By Robert Lerose.
The new year is right around the corner, holding out the promise of a fresh start for every small business. Many owners wisely make the time now to assess how their business performed in 2016, identifying clear successes as well as areas for improvement, before they set their goals and plans for 2017.
Megan Sullivan, a contributing writer to the Intuit QuickBooks blog, pinpoints these critical areas that every year-end business review should cover.
For many business owners, accounting issues are the central focus of their assessment process. You should print out a complete set of financial reports, including a profit and loss statement, balance sheet, and cash flow statement. This is also a good time to review your tax strategies and make any necessary adjustments. Depending on the scope of your operations, you may want to consult with an accountant.
"Cash flow is the best way to tell how your money was spent throughout the year," Sullivan says. Pay particular attention to these three things: operating activities (revenue and expenses), investing activities (assets purchased and assets sold), and financial activities (loans and repayments).
Go through your vendor list and verify that the contact information is accurate and up-to-date. Review their performance and consider replacing any vendors that have not given you the best value for your money.
Try to collect on all unpaid invoices to start the year with a clean slate.
2. Information technology
Back up all your data and make sure that your files are secure. Review your virus protection, malware, and spyware safeguards.
Consider downloading reports or files, especially if they're in a cloud-based system. "The golden rule for data backup is 2:1. That is, create two separate digital copies, stored in two separate locations, plus one offline copy (preferably stored somewhere else)," Sullivan explains.
Check how you name your files to make sure that the protocols are clear and work well. "Adopting file-naming conventions is especially important for businesses that share servers that can be accessed by multiple employees," Sullivan says.
Decide whether you will hand out any bonuses at the end of the year or in January. The timing decision will affect your profit reporting and tax strategy.
Evaluate your staffing to see if you'll need to hire, or let go, workers, both fulltime and part-time. Budget accordingly.
Assemble a list of the accomplishments of your business over the past year and share it with your team. Be sure to recognize any outstanding contributors or team members.
4. General business
Check your inventory to make sure it tallies with your records. Make adjustments up or down depending on your future plans.
Use the feedback from your team and the results of your financial analysis to see how close you came to achieving your goals in 2016. Use that experience to set new goals for the coming year and, just as importantly, a plan for how you will achieve them.
Go through every page of your website to see what has to be updated or changed. Check every link and your "contact us" information to make sure that they work properly and smoothly for web visitors.
Attending to even a few of these year-end review tasks can put you on the road to making 2017 a better, productive, and more profitable year.
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