Time for New Year’s resolutions, right? Wrong! Just like setting health and fitness goals or making resolutions at the end of or beginning of a year, they rarely play out. Sure, people, especially business owners, might have more free time during this time of year to reflect on the past year and ponder on the upcoming one, it is just a bad business practice to think once a year caring is near enough. I’m not going to say it isn’t a good thing as something is better than nothing, but it certainly isn’t enough.
So, you spend your Holidays getting caught up on all the end-of-year stuff, say bookkeeping. Yes, you have accomplished getting your books in order and are ready to be compliant for 2022 filings. However, if you had done your bookkeeping on a daily or at least monthly basis, you could have used that information to understand better and manage your business and not wait until year-end to know where you are at. You could also use that information to know what your tax liability will be and better plan for it as well as make sure you had timely Federal income tax payments to avoid late payment penalties that are required quarterly. Tax strategies as well are partially based on your books, so having incomplete or inaccurate books will hinder that effort as well. In fact, good, updated books are the core of most everything, so waiting for year-end to “catch up” on it is not the best scenario. You will have a better chance of accurately reporting your transactions and documenting them. For example, spending on advertising? If you are not recording that expense and the resulting revenues, how do you do a cost/benefit analysis on whether it is paying off or meeting expectations and whether you should stop paying for poor advertising results and begin a more effective campaign?
The main reasons to keep up with things and do planning year-round are to develop good habits and develop a good business mindset. With it, 2023 could be your dream year.