It’s that time again: a new calendar year and the opportunity to start fresh with goal-setting. If you're feeling extra ambitious this new year, set some financial goals for your small business. Here are five financial resolutions that you can put into action now for smooth sailing in 2022 and beyond.
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Set up designated business accounts
If you’re just starting your business, it might seem easier to use your personal credit card for start-up costs rather than to set up new business accounts. However, it’s extremely important to separate your business expenses from your personal finances.
For one, it makes keeping records easier; you’ll know exactly what expenses are business-related and tax-deductible at tax time. More importantly, you’ll be covering yourself in the event of liability issues.
If you’re a corporation and the line between personal and business expenses is blurry, you could be held personally liable for any business debts incurred.
Review your accounts receivable and payable
The beginning of the year is a great time to look your accounts receivable and payable thoroughly.
Go through any outstanding invoices and send friendly reminders to clients who owe you.
Then go through your accounts payable and make sure that you haven’t missed paying any vendors. Make it a goal in 2022 to avoid late fees by paying bills on time. This will help with monitoring cash flow.
Set one long-term business goal for 2022
Implementing small, quick changes is a great way to make new financial habits stick, but challenge yourself to think big and set at least one long-term goal for the year such as achieving a certain sales target; reducing company spending; or revamping your company’s brand.
Set your goal and check in on your progress each month. Don't give up if you've chosen a goal such as sales, and you have lower sales than expected one quarter. Instead, take the time to see where you can really make changes to fix it. Maybe you’re not charging enough for your product or services, or you’re spending too much on advertising to be profitable.
Find a bookkeeping solution that really works for you
Now that it’s a new year, evaluate your bookkeeping system if you have one and see if it’s really working for you; such as if you were doing your own books last year but no longer have the time to keep up with them, or if you can’t afford your local bookkeeper this year and need to look at more cost-effective options.
Seamlessly transitioning to another bookkeeping provider is easier at the beginning of the year; if you start fresh in a new fiscal year, you won’t have different sets of financials from multiple sources, which makes filing taxes easier.
This is also a good time to make sure your prior year books are in order, so that you’re ready to file taxes ahead of the deadline. It can be difficult and time-consuming not to mention unprofitable and dangerous to sort through a year’s worth of receipts and expenses to try to piece together financial statements.
If you're feeling stuck, some online bookkeeping services offer catch-up services to get your books caught up and provide you with year-end financials you can use to file your taxes.
File your taxes early
If there’s one financial resolution that you stick with, let it be this one: don’t wait until the last minute to file your taxes. On top of the added stress, you might miss deductions if you’re rushing to file, especially with the various COVID-19 tax legislation. Also, you don’t want to have to pay the IRS late fees or penalties if you can’t make the deadline.
If you already know that you’re not going to be able to get your books organized by the deadline, consider filing an extension. Also, figure out how you’ll file your taxes this year; either yourself, or using a tax professional, so have time to find someone and check them out carefully.
Ready to start off 2022 on the right foot?
Check out Bench and get one month of bookkeeping, free. If you’re already a Bench client, they can connect you to a tax pro through BenchTax and handle all the tricky tax time details.