The LedgersOnline team takes Halloween seriously, and we wanted to wish you a Happy Halloween by offering three not-so-spooky tips to help businesses get prepared for their calendar year-end. For many, October 31st marks the beginning of the end-of-year preparation process, and brings a whole new aspect into this busy season.
It is important at this time, to examine your business processes, and develop ways to manage outstanding debts and regain a focus on the financial health of your business.
Manage Outstanding Debts
For many businesses, the months of January and February are quite slow compared to the busy months of November and December. This is why it is important to create a list of outstanding debts, and focus on collecting them before Dec 31st. By managing outstanding debts properly, you can ensure that your business will have the necessary cash flow needed throughout the year.
Develop a Budget
As mentioned, many businesses slow down during the months of January and February. This means less cash-flow is coming in, which can greatly affect the business. Creating a budget for the months ahead gives the business an opportunity to realize potential problems ahead of time, and develop solutions as needed.
Your budget should include anticipated expenses such as rent, payroll, accounts payable, and any other expenses that will be paid in the foreseeable future. When compared to your current/expected cash-flow, how does it look?
Whether it is canceling unused applications or creating a more efficient and green business environment, there are many opportunities available for businesses to save money and make an impact on their bottom line.
Even simple changes, such as changing from incandescent light bulbs to fluorescent light bulbs, for example, is an easy way to shrink costs, while also taking promoting a greener business. CFL’s use 75% less energy when compared to incandescent, and allow for instant cost savings through your electric bill. While the initial cost is more expensive, these bulbs also last on average 10 times longer than incandescent. For more clever energy saving tips, see our “4 Energy Saving Tips for Your Business” blog post.
Although these bookkeeping strategies should be followed throughout the year, it is common for businesses to lose track of time, and take their focus off their financial health, even if it is only momentarily. By following these three tips, you are able to regain an understanding of where your business is at financially, and what you need to prepare in the upcoming two months to ensure that your business is organized for the end of the year.
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