The end of the year is right around the corner, and just like every year, it will be here faster than you think. Now is the time to complete tasks to wrap up 2024 — and to gain insights to make your business more profitable.
Make Your Business More Profitable
To help you get started, we put together this list of nine tasks to help you gather insights and get your business ready to generate higher profits.
#1) Review your profit and loss statement.
A profit and loss statement, sometimes referred to as an income statement or P&L statement, is a financial document that shows all of your business expenses and revenues over a period of time. At the end of the year, conduct a review of your profit and loss statement.
Reviewing your profit and loss statement helps you get a good look at how your business has performed over the past year, where you stand with your finances, and what you need to do to improve.
As you review your profit and loss statement, pay close attention to:
- Sales trends. What months were strong? Which months were weak? What were you doing during the good months? What were you doing during the bad months?
- Sources of income. What sources provided the most income? What provided the least?
- Cost of goods sold. Are costs too high? How can you bring them down?
- Profit margins. Did your profit margins go up or down during the year? How does your profit margin compare to others in your industry?
Reviewing your P&L statement can help you see where you need to cut costs and increase revenue. It can help you identify changes to make in the new year and make business decisions related to tax planning.
#2) Make important tax decisions.
As the year comes to an end, so do many of your opportunities to make changes that can impact your tax liability. Once it’s January 1st, you lose some options for making adjustments that can affect your taxes.
As you approach the end of the year:
- Prepare a projection to see what you might owe.
- Decide if you should increase spending or make any larger purchases before the end of the year to decrease your tax liability.
- Consider if you have any small business tax deductions you might have missed.
- Decide if you should defer income until next year to pass the income onto next year’s taxable income.
- Go through outstanding invoices that aren’t paid to see if you can write off any bad debt (if you operate on an accrual basis).
- Determine if you want to give bonuses to employees, shareholders, or owners to increase your tax deductions. (Note: Bonuses to shareholders and owners come with different tax rules than bonuses to employees.)
- Decide if you want to set up an employee 401K plan that benefits employees while offering your business a tax credit.
- Determine if you need to change your tax status.
By reviewing your taxes before the end of the year, you have time to make decisions that can benefit your business in 2025.
Read More: 7 Reasons to Start Year-End Tax Planning Right Now
#3) Review your cash flow statement.
To get a look at how your business performed over the last year and identify room for improvement, review your cash flow statement. A cash flow statement shows how cash is coming in and going out of your business.
Reviewing a cash flow statement helps you identify potential cash flow issues so you can put plans in place to resolve any problems you find. If your business is spending more than it’s making, your cash flow statement will help you identify why this is happening and how to prevent it from happening next year.
Read More: 12 Causes of Cash Flow Issues & How to Fix Them
#4) Review your accounts receivable.
As the end of the year approaches, look closely at where you may be missing income. Review your accounts receivable report. Accounts receivables are claims for payment from customers who have not paid in full for services or products.
While you should keep an eye on this all year, the end of the year is a good time to reconcile outstanding invoices. What you find can either help you improve cash flow by working to collect funds or it can help you determine what debt you would like to write off to decrease your tax liability.
#5) Conduct inventory, and audit your vendor list.
The end of the year is a good time to verify how much product inventory you have. While you may keep records, in many cases, the actual amount of inventory might differ from what you have in your records.
Having an accurate inventory count will ensure that you don’t over- or under-buy. It can also help you identify problems leading to a miscount of inventory.
While you’re at it, use this time to audit and check in with your vendor list. Talk to vendors to find out if they are making any changes in the upcoming year and how those changes may impact pricing and availability so you can plan ahead.
#6) Create a financial plan for next year.
If you want your business to be more profitable in the new year, you can’t simply hope for the best. You must take steps to move your business toward your goals, and the only way to do that is by creating a plan.
Analyze your financial information.
- Where is your business doing well? How can you build off that success?
- Where is your business not doing well? What can you do to improve?
- How is your cash flow? Do you need to secure investments or loans?
- Do you have a business budget? Did you stick to it? Do you need to adjust it?
- What are your primary profit drivers? How can you increase profit margins?
Also, consider factors outside of your business.
- What changes in the market may impact your business?
- What economic conditions may impact your customers’ buying decisions?
- What impacts may affect your operating costs?
After you answer these questions, create a sales forecast, list your cost of sales, and outline your expenses. Get your numbers down in a plan that can guide your business toward higher profits.
If you need help creating this plan, download our free Small Business Financial Planning Guide to create one on your own.
#7) Schedule time with your financial partners.
You aren’t the only business owner reviewing their finances at the end of the year. This is a time when many businesses analyze their financials and begin to craft plans for the upcoming year. That means that financial partners are getting booked up quickly.
Plan ahead and get time on the calendar to review your finances with your bookkeepers and accounting team, tax accountant, and fractional CFO.
If you don’t have any of these financial partners, don’t wait until you need them to find them. Start interviewing potential partners ahead of time so you are ready when you want to level up your finance department with a professional team.
Prepare the topics you want to discuss. Plan to have conversations about:
- Financial plans and goals for 2025
- Possible challenges coming in the near and distant future
- Opportunities for areas of improvement
- Future changes coming to your business or industry
If you don’t know what to talk about with your financial team, check out this guide of 40+ Questions to Ask Your Business Accountant.
#8) Mark important financial deadlines in your 2025 calendar.
To make sure you don’t miss any important financial deadlines or dates for your business, get out your calendar and start marking important dates.
Whether you use a digital or paper calendar, add all important 2025 financial deadlines. If it’s a really important deadline (like paying estimated taxes), consider adding a reminder the week before the deadline.
In your calendar, mark dates for:
- Paying estimated quarterly taxes
- Filing your taxes (or a tax extension request)
- Making IRA contributions
- Sending employee W-2 forms and contractor 1099 forms
#9) Create a 2025 marketing plan.
Don’t wait until 2025 to start your 2025 marketing. At the end of the year, look ahead to plan for how you will promote and market your business in the new year.
Set time to meet with key stakeholders in your company. Talk to your department heads, business partners, and marketing partners. Also, consider getting perspective from employees and customers to gain insights into what direction you want to take in 2025.
Answer questions such as:
- What were your goals in 2024? Did you reach them? Why? Why not?
- What are your goals for 2025?
- How will you track marketing success in 2025?
- Who are your best customers? How can you reach them?
- Are you launching new products or offers in 2025? How will you promote them?
- How much should you spend on marketing? What is your 2025 marketing budget?
- Do you have the resources you need to execute successful marketing strategies in 2025?
For help with creating a marketing plan, check out this template from Hubspot that can guide your efforts to increase sales, revenue, and profits.
#10) BONUS: Submit BOI Filing
Per a new government mandate, U.S. business owners are required to submit Beneficial Ownership Information (BOI) before January 1, 2025. Missing the deadline could result in daily penalties of $591 and potential criminal fines up to $10,000 or imprisonment for up to two years.
Protect yourself and protect your business. Review the new regulations and make a plan for filling before the deadline.
- Read our guide to BOI filing requirements.
- See how CFO2U can help with our BOI filing services.
Get Your Business Ready for the End of the Year
As your business approaches the new year, there is a list of things to do to get ready. These are just a few of the tasks that can help you analyze the past year and use what you learn to make plans to have a more profitable year.
Get your business ready for the end of the year — and the rest of next year. Download our free Small Business Financial Planning Guide to start to get organized or schedule a free discovery call to find out how our team of bookkeepers, CPAs, and financial professionals can help.
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