As 2015 comes to a close, it is time to review your business activities to see if you have met your goals or still have time to do so. Did you ever create an annual budget for the business? If so, are you up to date on your books and records so that you can compare your actual results to the projected ones?
Many small businesses do not have either a budget or up to date books, making it unlikely that they had a business plan where they wrote down their goals and developed a way to meet them.
Some businesses are stymied by the US Congress not having passed a law extending various tax provisions that expired at the end of 2014 and are usually extended retroactively to the beginning of the year when the lawmakers eventually get around to it. Some businesses go ahead and spend the money to buy new equipment even though they are not sure they will get the expected tax break in 2015 for the purchase. Others will wait until the law is passed. Then it might be too late to act. Some equipment can be purchased off the shelf while others require a lead time to create, test and place in service before year end. Manufacturers can anticipate passage of the extenders bill and order sufficient quantities of materials and have access to personnel and manufacturing facilities to create the goods on demand.
If a business has not kept its books up to date, how long with it take to get them current? Having up to date books can provide guidance for the end of the year's results. If the company has outstanding loans then the lender may have required the company to meet certain targets in working capital and profitability. Having current books can enable companies to make decisions so that their lenders will be satisfied with the results or can start to develop an explanation as to why they didn't meet their goals.
And 2016 is just around the corner. It is time to prepare your budgets for that year, too.
Will they be based on expected 2015 results? If so you will need reasonably accurate books for 2015 to develop the assumptions used for 2016.
Successful businesses usually have a plan and are implementing it well. See if you can take these steps to put or keep your business on the path to success.
Hi cpajoe! Thanks again for another timely and informative post! I wanted to bump this up a bit because the clock is TICKING for small business owners everywhere to make last minute preparations for tax time! In addition to reviewing what happened budget wise in 2015, and projections for 2016, let me add a reminder for everyone to check with their own tax attorney or accountant BEFORE the end of the year. This is the perfect time to check on any specific things that may need to be done to help their own bottom line for tax purposes.
Thanks for being such a helpful member of our community, cpajoe! I hope you and yours have a wonderful holiday season!
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