As Madeleine L'Engle said, "A new year can begin only because the old year ends." So, before you gush about all of the wonderful things the new year may bring, spend time ending the current year the best you can. The new year will thank you.
What are ten things your organization should be doing in December to end the year?
- Reduce taxes. - At the end of the year, you want to delay income but pay expenses to reduce taxes. (However, don't delay income, if it will hurt your pocketbook!) If you can send out your invoices a bit late in the month, you can delay paying taxes on that income until the new year. Also, you can accelerate expenses by replacing outdated computers, software, and vehicles, and consider paying your annual SaaS subscriptions and membership/association fees now, as well as buying inventory.
- Work with your accountant. - Every organization is different, so before you make any major financial decisions (as discussed in the point above), get tax advice from your accountant. Additionally, tax laws change frequently, so your accountant may be able to inform you of some special tax benefits that apply to your organization.
- Set up retirement planning. - As a business owner, you have until your tax filing deadline to set up and contribute to a retirement account, like a SEP-IRA or solo 401K. However, why not take advantage of it before the end of the year? According to Douglas Haig Alexander, AIF® with Manhattan Ridge Advisors (and MPWRSource Client), "The December 31st deadline is not really an issue anymore for qualified plans. With the SECURE Act changing the deadline from 12/31 to the tax filing due date plus an extension, the business owner now has more time. However, if the plan includes a salary deferral feature (401(k)), the plan will have to be established in time to allow employees to make salary deferrals from their 2022 salaries because those have to be withheld from the employee's paycheck. If the business is a sole proprietorship, for the unincorporated/self-employed/Schedule C individuals, the salary deferral election must be made by the end of the year in order for the individual to make salary deferral for the year."
- Make the switch now. - If you are dissatisfied with your bank and operations services, like accounting, human resources, payroll, etc., now is the perfect time to switch. By switching now, you can start brand new on January 1st.
- Cut costs. - Evaluate your budget and your expenses. Where did you overspend? Where did you not see a return on investment? Don't waste money in the new year on things that don't benefit or offer a return on investment for your business. For example, cancel subscriptions and memberships you don't use. Also, if you have sponsored an event for five years but have never seen a return on investment on that sponsorship, don't spend money on that sponsorship in the new year. Also, do you have five different technologies to handle your marketing and sales? Consider streamlining and making more efficient your marketing and sales more by consolidating into one technology. More times than not, consolidating technology services saves you a lot of money.
- Offer end-of-the-year deals. - All organizations, profit and nonprofit, need to generate revenue. Start the new year on the right foot by driving some revenue into your bank account. The new year's cash flow will thank you.
- Use your health care dollars. - Many health, dental, and vision plans have benefits that run out at the end of the year. Take advantage of these benefits before it's too late, and don't forget to remind your employees to do the same.
- Show your appreciation. - At the end of the year, make sure to show your appreciation to your clients/customers, vendors, employees, and business friends because your organization's success depends on them. Emails, handwritten notes, a phone call, a gift, and other means go a long way to show your appreciation.
- Support your community. - One of the best ways you can support your community is by making a charitable contribution. Nonprofits work diligently to empower the people in the communities they serve, so help support them through charitable giving. An added bonus is that you will get a tax deduction, too!
- Review and update your strategic and business plans. - This may be listed as number ten on this list, but in actuality, it should be listed as number one. Review your strategic and business plans to evaluate where you are and where you need to be. If you need to pivot, make the necessary course corrections, now. Conduct an annual end-of-the-year SWOT analysis to gauge your strengths, weaknesses, opportunities, and threats. By conducting an effective SWOT analysis, you will be better able to review and revise, if need be, your business plan and strategic plan. This analysis will help you set appropriate goals and KPIs for the new year, as well as create effective marketing and sales (growth) plans to achieve those goals.
I leave you with the following quote by Hal Borland:
"Year's end is neither an end nor a beginning but a going on, with all the wisdom that experience can instill in us."