January always stirs conversations about business planning for a new year. When most business owners think of financial goals, they typically think of sales and revenue goals. However, there are financial goals that fall in the arena of operations that are worth taking a look into. In fact, achieving some of these goals will improve your margins and help to streamline your operations.
Here’s a list of 10 of our favorite accounting projects:
– If you find yourself having to track down anyone with a company card at the end of every month, or randomly finding unpaid purchase orders under a stack of papers on your desk, this is the project for you. Implementing a purchasing procedure is merely creating a workflow for how purchases get processed. It’s a way to get everyone on the same page as to how purchases are handled, so when you or your bookkeeper are ready to record and pay purchase orders, all the information is complete and readily available.
– Many small businesses don’t have a backup of their financial records. This can be disastrous should your computer be infected by a virus, or should you accidently delete data. If you don’t already have a system for creating financial record backups, add this to your 2018 goals.
Receipt Filing System
– Do you lock yourself in your office from April 1st – 15th of every year? If so, you may want to ditch the shoebox method for filing receipts. Organizing receipts can be difficult, especially with the combination of ACH, digital receipts, and paper receipts. It’s nearly impossible to figure out if there is not a filing system in place. Spend some time this year creating a digital and paper filing system so you can quickly file receipts as they are processed and avoid the dread of tax time.
Account Receivables SOP
– As you wrapped up your finances last year, you may have noticed quite a few accounts that went unnoticed and unpaid for the majority of the year. If you are struggling with cash flow due to unpaid receivables, you may want to create a standard operating procedure for quarterly audits of unpaid accounts and a follow up procedure to ensure they get paid.
Update or Move Accounting Systems
– As companies grow, so do their accounting needs. Perhaps you began your company with a user friendly software, but as your clients and offerings increased, you now find the software clunky and not as customized to your business as you’d like. This may be a good time to switch systems or hire an excel programmer to create custom workbooks. Often, the time saved by automating the “work around” you currently input manually, is exponentially more valuable than the money spent on upgrading.
Chart of Accounts
– If you don’t already have a chart of accounts from your bookkeeper, accountant, or tax professional, you are most likely missing many deductions on your annual returns. Having a chart of accounts not only helps to keep your receipts in order, it also helps you to understand your margins with clarity and find room for optimization. If you already have an established chart of accounts, if doesn’t hurt to have them reviewed periodically to ensure there are no modifications needed.
Big Purchase Research
– At the end of the year, if a company thinks they might make more profit than they are comfortable with, they will sometimes make a large purchase to reinvest in the company, rather than pay taxes on the gains. If you wait until December 15th to start looking into what you may want to purchase, you run the risk of overpaying or making a decision you regret. Instead, have a few ideas pre-researched and ready to consider should you find yourself in a position to make a big purchase at the end of the year.
– Most businesses shop their competition in order to price their product when they first open. However, very few small businesses continue to shop their competition over the years. Even if you can only do it once a year, it’s a wise undertaking to price your competition. In many cases you will find the average market price has gone up, allowing you to also raise prices and stay competitive within your market.
– Appreciation eventually affects all prices, even the products that have a traditionally stable price point. Depending on your industry, you will want to create several projects a year to review price shifts on any cost of goods sold. Industries with rapidly shifting prices, such as food should do this on a monthly basis. Industries with more stable pricing may be able to do this quarterly or biannually.
– One frequently overlooked financial project is the contracts. It’s a good idea to have an attorney look over your financial contracts annually to ensure they still meet your needs. Your accountant should also evaluate payment terms and conditions and determine whether payment terms, late fees, or interest rates should be adjusted.
If you think some of these goals may be valuable to your company, but you don’t think you have the bandwidth to add on the workload, consider creative and cost effective solutions, such as using an accounting staffing agency or hiring a consultant for a specific project. Business planning for a new year sets you up for success done the line, and establishes your shorter term goals to succeed.
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