With eyes set in 2020, it’s no surprise most business owners want to head into the New Year with clarity for success. The winds of economic uncertainty are swirling and we want to ensure we’re supporting our community with a gameplan for success.
Accounting isn’t only about timelines and accuracy of numbers–it’s also key to your business strategy. You want to make sure you’re setting yourself up for success by ensuring inputs toward your goal equal the outputs. This list is one part strict accounting, one part business strategy for year-end accounting health. Here are the top 9 actions to consider taking over the next 60 days.
1. Review Your Financial Statements (Seriously)
Too many business owners receive financial statements but never look at them. No hard feelings, but it’s a sloppy practice. It’s why we require our clients to have a monthly financial review. Looking at your financials is a primer for asking questions like:
Why did we incur this marketing expense?
Is there a better way to break out labor so we can calculate labor efficiency?
We added a new service line but didn’t change the chart of accounts…why?
Why are we still paying for this software subscription?
We are paying how much for healthcare benefits?! Is there a better way??
2. Build a 2020 Plan
I’m not maniacal about building a forecast down to a level of detail of how many pens we are buying for the office, but getting a budget in place is good discipline. It brings your leadership around the table to take accountability and own the financial results of their department. Remember, financial statements are just a scorecard but someone should be responsible for every single line item. Getting a plan in place with your team’s input increases the likelihood of successful execution.
3. Plan for More Accountability
How many times have you become frustrated with yourself when your team doesn’t seem to be taking the ownership you need them to? Well, it’s 100% your responsibility and structure and process is the name of the game. We have standardized our own accountability planning on Asana and have been recognized for how we do it. We’re happy to share our best practices with you if you would like to schedule a time to chat.
4. Get those W9’s Signed
If you have vendors you have paid but don’t have a W9 on them, please make sure to get that into your files. You’re going to save a ton of time issuing 1099’s if your W9’s are organized. I know I’m digging into the details here but in all honesty, this is one area many companies are sloppy about.
5. Review Payroll Accuracy
Nothing is more transparent in a company than the W2 that all employees receive by January 31st. Make sure it’s right–specifically that all deductions and benefits have been properly captured. It’s a serious pain to re-issue W2’s, so pay attention to make year-end accounting a breeze.
6. Review your Bookkeeping Partnership
Are you uneasy about your current bookkeeper? Has your business experienced significant growth that you feel needs more disciplined processes? Or are you finding your financial statements to be unreliable? As you come into the New Year, consider your partnership and whether up-leveling your outsourced expertise makes sense.
7. Run your Net Promoter Score Surveys
Consider sending out net promoter score surveys to your clients. This will allow you to receive candid feedback on how likely it is for clients to refer you. It’s helpful to go into a new period with a clear view of reality and use it to set priorities for continuous improvement.
8. Set Your 2020 Intentions
What is your theme for the company going into 2020? At Stride, our theme is stabilization. We’ve experienced fast growth and want to ensure our quality of service continues to expand as we grow. What are your intentions for the year? Are you going to add a new service line, grow revenue, expand geographies, increase profitability, or invest in new capital equipment? Isolate a few critical intentions and commit.
9. Consider Fear Setting
I love this idea made popular by Tim Ferris. Basically it’s an exercise of defining the worst things that could happen, asking yourself how you will prevent them. And then, should the worst thing happen, how you would repair it. When you have completed a pre-mortem on what could derail your plans in 2020, you’re ready for anything and can take preventive action.
When I present to entrepreneurs, I remind them that they don’t need to become bookkeepers and accountants, but they do need to ask the right questions about their business. The best leaders are proactive with their strategic planning and use their accounting to keep score and make adjustments. If you follow these steps over the next 60 days, your year-end accounting will be set up for success.