Back to Business!
Is it too early to prepare for a smooth transition into 2023? No!
It’s the perfect time to do some advance planning for next year with some bookkeeping tasks that will help put your business on track for a strong year ahead. After all, you can’t get where you want to be if you don’t know where you’re going. Here are four steps to take now in preparation for the upcoming year.
- Do a yearly budget and financial forecast.
What do you foresee in terms of revenue and business expenses? If you’ve been keeping good records all along, look back at the past few years and develop a reasonable budget based on prior years’ sales, cost of goods sold, controllable expenses and other line items that affect your bottom line.
A clear forecast for all relevant income and expenses will serve as your financial road map and enable you to make nimble course corrections depending on actual sales.
- Run a cash flow projection.
This is directly related to your financial forecast. Work with your bookkeeper or accountant to lay out a cash flow calendar, if you will, by month or quarter, to avoid nasty financial surprises and be better prepared to ride out the low points. It’s all in the planning.
Remember, the cash flow projection is an estimate—albeit a very informed one—that will be adjusted according to your actual revenue throughout the coming year.
- Implement internal controls.
Who’s minding the store at your company? Does your bookkeeper or manager have total control over everything related to your business accounting and cash? Of course, you trust your staff … but it is a wise business owner who puts procedures into place to identify fraud and make it more difficult for anyone to fudge the numbers or walk off with the goods.
With so much on the line, it’s vital that you safeguard your assets.
- Set and measure your KPIs.
Every business and business owner have different key performance indicators (KPIs) that help inform the company’s success in reaching stated financial goals. Think about the KPIs for your particular business that you’ll be measuring and share these with your team. These may include:
- Number of sales conversions from incoming sales calls
- Gross profit and net profit margins
- Aging accounts receivables
- Debt-to-income ratio
Here’s a fifth step to take as you plan for 2023: have a CFO review your books to ensure everything is correctly entered, that your financial reports are prepared properly for your tax accountant, and that you understand all the various pieces of your company’s financial puzzle.
CFO Your Way can work with you or your bookkeeper to ensure your financial paperwork is organized, that your accounting software is set up correctly, and help you determine a smart budget for next calendar year based on your actual sales history. And, as a virtual CFO practice, you don’t need to take on another employee to have your corporate finances put in good order.
Schedule a Complimentary Consultation to discuss your needs.