3rd Quarter Is Over How Is Your Business Doing?

17 Oct 3rd Quarter Is Over How Is Your Business Doing?

I’m always surprised when I sit down with a business owner and find that they don’t know how much they have earned (or lost) so far this year.  Most can tell you if they have money in their account or not but very few can tell you what their bottom line is.  An even smaller percentage can tell you if they are facing a large tax liability.

Here are a few good practices that can help you stay in touch with your bottom line and limit costly tax surprises.

• Reconcile all cash, liability, and payroll accounts to ensure accurate financials.  Waiting until you are busy with other tax related activities between January 1st and April 15th will lead to overlooked errors and more stress than you need.
• Review your income statement even more closely than usual at the end of the third quarter.  Are your income and expenses posting clearly and accurately?  Now is the time to make changes not after you close the books at year end.  Are you making money?  Are you on target?  Review financials as a previous year comparison to help you evaluate and detect anomalies.
• Send a copy of your accounting files to your tax and financial advisers in the early fall.  This gives them time to look things over and advise you before it is too late.  Waiting until tax time is a terrible idea.  Accountants and financials advisers are slammed from Dec 15th until May 1st.  There is also VERY little if nothing you can do after January 1 to adjust for unexpected gains or losses so get on the ball NOW!  If your tax preparer doesn’t advise you on tax planning find a new tax preparer.

It often seems easier to do it later, but time is tricky.  Once time is gone you can’t get it back.  Take advantage of the time available to you now.