A thorough review and understanding of where your business stands can help guide decision-making throughout the year -- and year-end is a fantastic time to evaluate where you're heading. A thorough strategy and budget review can provide a great starting point for discussions about business finances, goals, risks, tax strategy and even things like hiring, growth and compensation plans.
So while any time is a good time to determine if your finances and operations are currently on the right path, use your end of year review to help set your business up for a solid start to achieving next year's goals.
Fortunately, our outsourced finance and accounting team is here to share essential tips to getting the most of your year-end strategy today.
Why consider a year-end strategy review
Facing a new year, it is particularly important to have a solid financial plan and know where business is headed.
Changes in the economic, political and social climate can have profound impact. A year-end review marks a time to step back and examine where you stand -- and it can provide value insight for planning the year ahead.
Understanding your business outlook
The first step is taking a clear, hard look at your bottom line by reviewing:
- Income statements
- Cash flow
And don't forget to involve your team. When evaluating the state of your business, they may have unique perspective on the numbers and what is or isn’t working.
If you have extra funds…kudos, your planning paid off.
Capitalize on returns by considering where to invest your revenue to further your business goals. For example: Are you expecting to grow in the year ahead? Extra budget could go towards resources to benefit or streamline your team or for new hires.
If the results are concerning… evaluate cash flow and determine what areas in your budget differed from your forecast. Depending upon what you find or how complex your situation is, this may be the time to bring in a third-party auditor or forensic accounting expert to do a deeper dive.
If it's just a matter of adequate cash flow, questions to consider:
- Were these unique situations or ones that you can now need to account for?
- Are there opportunities to streamline operations, automate processes or choose more cost-efficient services?
The important thing is to think ahead and consider where does your company need to be -- then devote the end-of-year budget to getting there.
Looking ahead: strategies for the New Year
A year-end review is just that. A review. One of the most important steps is turning the data and input you’ve collected in this review into a plan for the upcoming year.
But don’t stop there -- be sure to keep your financial info up to date and regularly review your progress.
If all of this seems overwhelming, consider an outside opinion on your company’s performance or upcoming strategy. Focused Energy is an outsourced team of expert CFOs, COOs, financial and operational strategists -- and we can help.