How Home Business Owners Can Get Ready for Year-End
Summer is typically the season for vacations, family get-togethers, and outdoor activities. During the long, hot days of summer, the end of the year may seem far, far away. Before the official end of summer, however, the days are already growing shorter, and spectacular autumn foliage will soon be on display in some parts of the country. Depending on the nature of your business, you may be approaching your busiest season or your slowest season, but the chances are that your personal life will become at least a bit more hectic as the year draws to a close. Before you get swept up in holiday activities, you might want to consider getting your home-based business affairs in order so that you can start the new year off right. Here are some things that you can do to make it easier to bid farewell to the current year.
Get With Your Registered Agent
Your registered agent provides a critical service that your business cannot afford to let lapse. Although it is rare, states sometimes change the rules for registered agents, so it is a good idea to check in with yours to make sure that everything is copacetic for the coming year. If you do business in multiple states, be sure to contact each of your registered agents. If you are paying high fees, you might want to consider looking for ways to reduce the amount you are paying your registered agent. You could attempt to negotiate a lower rate, or you could change agents. At PhysicalAddress.com, when customers sign up for a virtual business address, we offer them the opportunity to have us serve as their registered agent at no additional cost.
Run Your Accounting Reports
You cannot prepare your official year-end income statement, balance sheet, and other financial statements yet, but you should run them now so that you can address any issues before it is too late. These reports can also provide valuable information for revising your business plan, preparing next year’s budget, or reviewing the effectiveness of your marketing campaigns.
Take an Inventory
If you are a typical small business, a large percentage of your funds are invested in finished goods, raw materials, or parts, so proper inventory management is critical. Regardless of the type of business you operate from your home, you may have issues with your inventory, and you do not want to wait until January to discover them. If you have items that you purchased from a wholesaler that simply are not selling, you could see whether you can return them for a refund, or you could try to move them by slashing prices. If you have items that are too damaged to sell, you can start writing them off each month to spread the impact out over a longer period. If you have usable items that you cannot seem to sell, you might consider donating them to a charitable organization so that you can take a tax deduction.
Start Thinking About Your Budget
Budgets are valuable tools that can help guide you when it is time to make important financial decisions. Compare this year’s budget to your actual spending to see where and why variations occurred. You can use this information to help you decide how to allocate your funds next year. For a home-based business, some categories that often show significant variations include marketing, shipping, utilities, and insurance.
Review Your Insurance Policies
As an entrepreneur, you may have a variety of insurance policies, including liability, workers’ compensation, property, medical, vehicle, and life insurance. Review your policies to determine their limits, costs, and renewal dates. You might want to consider obtaining quotes from a few different companies, or you might want to bundle as many of your policies as you can if it will reduce your costs without reducing your coverage. You could also consider increasing your deductibles on certain policies to lower your premiums, but make sure that you could meet those deductibles if something happens.
Contact Your Bookkeeper or Accountant
Your accountant or bookkeeper will need certain information from you to prepare your taxes, file annual reports, or issue 1099s and W-2s on your behalf. Ask them to provide you with a checklist of exactly what they need from you, when you need to have it in their hands, and how you should submit it. The smoother the process, the faster they can complete your work, and this could potentially save you money if they do not charge a flat rate.
The last quarter of the year can be an especially hectic time for many individuals and companies. Breaking your year-end tasks into smaller, more manageable pieces that you can complete as you go can help you reduce your stress levels, but it can also give you more time to spend with your family, think about new ways to grow your company, and start the new year feeling more energized.