Year-End Accounting Checklist for Businesses

Home
The Blog
Page 2

Although the end of the calendar year is still a couple of months away, it’s not too early to think about the things that your business needs to do to prepare for the upcoming tax season and to make sure your financial house is in order for the year to come. To avoid stress and frustration, it helps to get an early start on your company’s year-end accounting tasks. Here are a few things you can do to ensure that you have smooth sailing. Your virtual chief financial officer can provide you with specific advice based on your business’ exact needs.

Check Up on Paperwork for Vendors

If your company worked with any vendors or independent contractors throughout the year and ended up paying them more than $600, you are required to send them a 1099 at the start of the next year. To do that, you need to have the correct paperwork on hand for those vendors, usually a W-9. Go through each of your vendor’s files and make sure you have their information, including their current address and tax ID numbers. If not, you should send them a W-9 to fill out. Doing this before the end of the year will help you avoid scrambling to get your 1099s out in a timely fashion at the start of 2018.

Evaluate Profits and Loss

Reviewing your company’s profit and loss statement or income statement lets you take the pulse of your business. You’ll be able to see if you’re bringing in enough revenue to thrive or if you’re continually spending more money than you earn. Knowing whether you are in the black or in the red can help you determine if you need to cut back on certain expenses or if you have enough money on hand to make a large purchase. It can also help guide you as you create the budget for your company for the next year.

Consider Any Last-Minute Purchases

If your profit and loss statement is showing profit, it might be in the best interests of your company to invest some of that profit in the purchase of equipment or supplies for your business. That way, you can begin to take advantage of the item’s depreciation on this year’s tax return, rather than waiting until the next year.

Follow Up on Accounts Receivables

As the end of the year approaches, it’s a good idea to collect on or at least attempt to collect on any unpaid accounts receivables. Making sure your business is getting paid by the customers it works with is one way to help improve your cash flow. Also, the sooner you contact people or companies that still owe your business money, the more likely you are to have them pay you. The longer an unpaid invoice remains unpaid, the more likely it is never to be paid.

Get Started on Next Year’s Budget

The end of the year isn’t too soon to start thinking about and planning your company’s budget for next year. In fact, it makes sense to have at least a first quarter budget outlined before December 31 rolls around. That way you have an idea of whether or not your business will have enough income to cover the costs of any new expenses during the first part of the year, such as any new hires you want to make in January.  When creating a budget for the new year, add up expected expenses and compare them to your anticipated income.

Schedule a Meeting with Your Virtual CFO

To avoid the tax-season rush and to make sure that your company’s financial ducks are in a row, the end of the year is an ideal time to schedule a check-in with your company’s virtual CFO or to consider outsourcing some financial responsibilities to an outsourced CFO if you haven’t already. Your CFO can help you piece together an action plan to make sure your company is on track to achieve its financial goals and other objectives.

To learn more about New Direction Capital and how our virtual CFO services can help your company prepare for the end of the year and for the future,  http://newdirectioncapital.com/contact-us/contact us today.

Image courtesy of 1shots at FreeDigitalPhotos.net

Share this on social...

Few people relish the idea of telling someone they’re doing something wrong or that there’s room for improvement. But if your employees don’t receive  constructive criticism, they’ll have no idea where they can improve or if they aren’t doing something correctly, which can have a negative impact on your company’s growth. Giving negative feedback doesn’t have to be something you or other leaders at your company dread.  If you let your emotional intelligence, or EQ, guide you, you might find that giving constructive criticism becomes a positive experience for your employees and for you.

Get the Timing Right

When’s the best time to offer an employee feedback? Ideally right after you notice a certain behavior or right after a presentation or other project is completed. If you delay offering the feedback, it might be difficult for you or the employee to remember exactly what you’re talking about. Delivering feedback at the right time is essential whether you have something positive to say or something constructive to offer.

Make the Feedback Process a Conversation

Delivering feedback to an employee shouldn’t be a monologue. Remember that he or she is a person and has his or her own thoughts and feelings. One way to ease into a feedback conversation is to pass the ball to your employee. Ask him or her how he or she thought a project or presentation went or, if you’re conducting a performance review, ask him or her what areas need improvement or what his or her weaknesses are.

If your employee mentions specific things, listen to what those area, then start your feedback discussion by ask how he or she thinks those areas can be improved. Even if you have different areas you want to focus on, it’s important to make sure you listen to your employee’s concerns.

Be Specific

Vague feedback, whether it’s positive or negative, is pretty much useless feedback. You might think you’re helping out an employee by telling him or her “great job!” or “really nice work!” But if you don’t explain what was a good job or why, you’re not giving your employee much to go on. He or she won’t know exactly what it is he or she should keep doing.

The same is true for negative feedback. A comment such as “you seemed nervous” doesn’t help an employee very  much. If you think someone seemed nervous during their presentation, explain why. It might have been because he or she kept fidgeting or pushing hair away from his or her face, for example.

Make It About You

How you phrase feedback can make it either sound like a personal attack, causing a person to get defensive, or it can make it sound like a fact, something that you can work on together. When you make constructive feedback about yourself, you shift some of the blame away from the employee and turn the criticism into something he or she can’t argue with. For example, if you say, “when you were fidgeting during your presentation, I felt that you didn’t want to be there,” you make an assumption about your team member, which he or she can refute.

But if you say, “when you kept pushing your hair to the side during your presentation, I felt distracted,” you tell the employee how his or her actions affected your perception of the presentation.

Consider the Compliment Sandwich, But Don’t Rely On It

The compliment sandwich, offering positive feedback, followed by constructive, then followed by positive again, is a common technique used by managers to let their employees know when something needs to change. The technique is so common that employees can smell it coming from a mile away.

That said, you can still use it, but keep in mind that you don’t always have to. Sometimes, offering positive feedback on its own is the way to go. At other times, your employee might benefit from only hearing the constructive feedback.

The team at New Direction Capital understands the importance of building and managing positive relationships with your employees. Contact us today to learn more about how we can help your company weather any growing pains.

Image courtesy of franky242 at FreeDigitalPhotos.net

Share this on social...

Image courtesy of freebieshutterb at FreeDigitalPhotos.netAs business and the world becomes more and more connected, the risk for data breaches increases. In 2016, half of all small businesses in a survey experienced a data breach over the course of 12 months. Data breaches aren’t only common, they are expensive. The average breach costs more than $7 million, according to Business Insider.

Knowing what to do to minimize the risk of a data breach is just part of the solution. Your company also needs to have a plan for what to do in the event that a breach does happen. Following these four steps will help your company contain the breach and minimize the damage caused by it.

Stop the Breach

The first thing your company should do if a data breach occurs is make every effort to stop the breach. You don’t want your business to be the victim of multiple attacks, nor to you want to have the private information about your customers out there for any hacker or criminal to see. Putting an end to the breach usually involves several steps. You may need to change the network you are using or take certain equipment offline, to cut off the access the hackers have to the files. You’ll most likely need to change passwords and scour the web to see if there is any confidential information out there about your company, which might have made it easy for the hackers to get in.

At this point, you’ll also want to bring in a legal team to keep you updated about your rights and responsibilities after the breach, as well as a team to look into the cause of the breach.

Examine What Caused the Breach

Several things can put your business at risk for a data breach, including employees who don’t know the basics of security or who don’t understand the importance of strong passwords. In some cases, software malfunctions can be responsible for a data leak. Knowing what caused the breach is essential, as it will help your company determine the best way to stop it and the best way to correct any vulnerabilities that put your company at risk.

Tell Anyone Who is Affected

According to the FTC, in most parts of the US, a business has a legal obligation to notify people affected by a data leak. Even if your business is based in a state where notification isn’t required, it’s in the best interests of your company to tell those affected. You’ll also want to let the police know about the incident. You might also want to let the FBI know about it, depending on the size of the breach and the experience of your local police force.

In many cases, you’ll also need to tell credit card companies or financial institutions about the incident. Since those companies handle the accounts of people who might have been affected, it will be their responsibility to monitor certain accounts for suspicious activity or fraud.

It’s not enough to just tell individuals about the data breach. Your company should also offer some guidance and assistance helping people figure out what to do next. Let people know the extent of the breach and what data might have been compromised. For example, if a person’s credit card number was revealed, the next step would be to shut down that card and issue another one. But more steps need to be taken if a person’s social security number is compromised, since hackers can use those numbers to open new accounts or to commit tax theft.

Go Into Damage Control Mode

How your business responds to a data breach can sink it or help it stay afloat. It’s important to be there for the people affected by the breach and to offer as much support and guidance as you can. For example, your company might consider paying for credit monitoring or a credit freeze for the people who’s information got leaked. It’s also a good idea to offer individuals affected by the leak multiple ways to get in touch with your business and to ask questions.

Perhaps most importantly, you want to tell the public what you’ll do to keep a breach from happening again. Regaining the trust of your clients can make or break your business after a data breach.

A data breach doesn’t just harm your company’s reputation. It can also have a negative effect on your business’ finances. To learn more about how to manage your company’s finances to prepare for a potential breach, contact New Direction Capital today.

Image courtesy of freebieshutterb at FreeDigitalPhotos.net

Share this on social...

Image courtesy of jk1991 at FreeDigitalPhotos.netWhen an employee who was once one of your company’s top performers, who always seemed to have the best ideas, suddenly stops bringing his or her A-game or suddenly seems apathetic about the work, what’s changed? It’s most likely burnout, a combination of factors that can turn your best employees into your worst employees. Burnout often stems from high stress levels, exhaustion and boredom.

Although there are many contributing factors to burnout, the thing that’s important to remember is that it’s not inevitable. There are things you can do to help your employees stay engaged on the job and to help them avoid burning out.

Don’t Overburden Your Team

When your employees have too much on their respective plates, such as lengthy to-do lists or enough work to keep them in the office well past dinner time on the weeknights or that makes them come in on the weekends, they’re going to be more likely to burnout, due to sheer exhaustion. If your team regularly stays late or often looks panicked or concerned that they just won’t finish all of their tasks, it might be time to re-evaluate the size of your staff or the number of tasks you assign each person.

It might be that hiring a new employee or two is the way to go, so that you can better distribute the workload. If hiring full-time people isn’t in your company’s budget at the moment, another option is to outsource certain tasks or responsibilities. For example, it might get to the point where it makes more sense to work with a virtual CFO when it comes to managing your business’ financials, rather than expecting one of your employees to take on that work.

Encourage Them to Follow Their Interests

Boredom and lack of interest on the job often leads to burnout. Maybe your top employee started doing the drudge work months ago or when he or she first started and never stopped. Now, those menial tasks might have become his or her responsibility, even though they are keeping him or her from doing the work that’s genuinely interesting. Checking in with your employees every so often to make sure that the projects and tasks they are working on are actually exciting and challenging for them willl help you avoid having a team of apathetic, burned out employees on your hands.

Include Breaks in the Schedule

Make time off and breaks a part of each employee’s schedule. Don’t just encourage your team to take a lunch or to pause every few hours for a break. Implement a schedule that makes breaks a part of your work culture. That can mean having a designated time for lunch for everyone, every day or having a 15-minute company-wide coffee or tea break in the middle of the morning or in the afternoon. If many members of your team watch the same TV show, make a discussion half hour part of the workday the morning after the show airs. Making breaks a part of your company culture doesn’t only encourage your team to rest, it can also help to build morale.

Offer Incentives and Rewards

Another common reason for burnout is that employees just don’t feel appreciated. They might burn the candle at both ends, only to feel that their bosses or superiors aren’t taking notice or don’t care about their work. Employees might feel under or unappreciated for a few reasons. They might feel that their salary isn’t commensurate with the amount of work they put in. They might not see the point of the work they do or might feel that it’s not respected or valued. Or, they might feel that no matter how much they do, it’s not appreciated by the company as a whole.

The rewards you offer employees don’t have to be major.  Free food is often a great motivator, for example. Taking the time out to tell your team that you think they are doing a great job or to recognize the specific work or tasks completed by some members of your team can also go a long way towards preventing burnout.

If your team is stretched thin, but you don’t have the resources to hire more full-time employees, New Direction Capital can help. We’ll work with your team to help you solve your problems and grow your business.  Contact us today to learn more.

Image courtesy of jk1991 at FreeDigitalPhotos.net

Share this on social...

If you asked most business owners what they wanted for their companies, it’s likely that the vast majority would say that they hoped to be successful. Success can take many forms. It can mean turning a profit in the first year, expanding to new markets or getting the attention of a new customer base. Whatever your definition of success is, it’s very likely that one or more habits are keeping you from achieving it. Take a look at some of the more common bad habits that get in the way of success and see what you can do to break them.

You Focus on the Small Things

It’s very easy to let all the little details of running a business distract you from the bigger issues or projects you need to tackle. Meanwhile, those larger projects languish or never get completed. One way to get out of the habit of focusing on the tiny tasks is to sit down at the beginning of each day (or the end of the previous day) and make a list of the most important two or three things you need to do that day. Once you’ve made your list, choose the most important of the three and then make a list of what you can or need to do to get that project or task done.

If the smaller matters of the day, such as replying to email messages or voicemails, tend to distract you, don’t feel that you need to ignore them completely. Instead, set up specific times to handle those issues. For example, you can check and respond to emails right before lunch or in the half hour before you leave work for the day.

You Don’t Delegate

Even though you might own the business, that doesn’t mean you need to make every project or every task that relates to the business your responsibility. There are probably a number of things that you can ask another person to do, freeing up your time and attention for the things that matter most. For example, you can have an assistant take care of the daily nitty gritty details, such as booking travel, ordering lunches or scheduling meetings. When it comes to larger, more complex projects, you might consider outsourcing to a professional, such as hiring a virtual chief financial officer to help manage the financial details or a web developer to put together and manage the day to day operation of your company’s website.

You Don’t Set Goals

If you don’t know what your goals are, how can you ever reach them? A key part of achieving success is knowing exactly what you’re working towards and how you’ll get there. One way to set goals is to focus on SMART goals, which are specific, measurable, achievable, results-focused and time-bound. When creating a goal, think about what you want to do, how you plan on doing it and why doing it matters to your company.

You also want to have some way to gauge the results of the goal. How will you know if you have reached it or not? It’s also important to make your goals realistic, or something your company can actually do and to focus on the results of the goal — what will achieving that goal accomplish? Finally, give yourself a deadline for completing the goal so that it doesn’t drag on and on.

You Worry About Being Perfect

The road to success is paved with mistakes. It’s a rare company that’s able to scale and grow without facing a few bumps along the way. Don’t focus on perfection. Instead, look at any mistakes your business makes as a chance to learn. What could you have done differently this time and what can you do better next time?

You Don’t Pay Attention to Money

Some businesses develop the mindset that money doesn’t matter. They’ll spend and spend, assuming that they will start turning a profit soon and that their money troubles will be over. While few people like hearing the word budget, having one and sticking to it can be the difference between having a successful business and having one that has to shut down due to bankruptcy.

You don’t need to be a financial expert to successfully run a business. New Direction Capital can help your business put together a financial roadmap that leads to success. To learn more about how our virtual CFO services can help your company, contact us today.

Image courtesy of bplanet at FreeDigitalPhotos.net

 

Share this on social...

1 2 3 4 5 25
Newsletter

Receive our "7 Signs It's Time to Hire a Virtual CFO" special report free when you sign up for our monthly newsletter!

Copyright 2017 · New Direction Capital