How to Prepare Your Finances for the New Year

The end of the year is traditionally a time for winding down. But as those who run successful businesses know, it's also a great opportunity to start gearing up for the New Year. Here are some ways you can get to work at putting your business in a great position for 2021:

Run your financial reports.

When you manage a business, it's essential to always know where your business finances stand. Running financial reports, such as an income statement, balance sheet, and cash flow statement can help you determine the financial health of your business. If you use financial software, you can usually run these reports quite easily.

Analyze your sales.

Just as it's important to understand the financial health of your business, it's also important to look at the health of your sales. How did your sales perform in the past year compared to the previous year? What products were sold most? Who were your best customers?

Have a plan for the new year.

Once you know your sales and the financial health of your business, you can start planning for the year ahead. Begin by writing down specific goals and steps for meeting them. For example, if you want to add a new service or product, develop a marketing plan for how you will introduce it. Will you use social media or email marketing to promote your product?

Set a budget.

With your goals established, you can begin allocating money for the next year. Be sure to be specific with your line items and to track spending in the New Year.

Monitor accounts receivables and payables.

Before you close your books for the year, make sure you have collected all payments and paid all your invoices.

The bottom line is that the end of the year is the ideal time to work on your business planning and get off to a great start in 2021. Who doesn't like the sound of that?


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