10 Things Small Businesses Should Do Before Closing Out the Year

As the year draws to a close, most small businesses will be turning their attention to tax time. But there’s a lot more you should do before turning the page to 2010. You’re already reviewing your books and crunching numbers to get ready for next year. It’s the perfect time to do a little checkup on where your business has been and where it’s going. Because, like the old saying goes, “By failing to prepare, you are preparing to fail.” So here’s a checklist of 10 important things most small businesses should do before closing out the business year.

Get your books in order. While this should go without saying, you’d be surprised by the number of business owners who wait until the very last second to start pulling their financial life together. Make sure all business expenses have been made and entered into your accounting system as well as final invoices sent out. Check to be sure all details surrounding payroll are in order and your tax and other important papers are organized heading into next year. If doing your own books takes too much time away from your business, you might consider hiring an accountant. Their expertise might more than pay for itself.

Don’t forget Uncle Sam. If your business pays quarterly tax estimates, remember that your last payment for 2009 is due by January 15, 2010. If you don’t pay estimates, you might want to start keeping an eye on them just so there are no big surprises come tax day. Plus, doing so could help you minimize your tax liability by knowing whether or not to purchase deductible business expenses or make large charitable contributions.

Review your finances. You’re already cleaning up the books; examine your balance sheet, income and cash flow statements to get an idea of the overall health of your business. If you want to dig a little deeper, check your business’s total debt ratio and profit margin. All of this will help you in setting goals and planning for next year. The more accurate your numbers are, the better you’ll be able to plan for the upcoming year.

Review your insurance and benefits package. Compare all of your policies, premiums and coverage to different providers to make sure you’re getting the best rates and best overall value. Insurance premiums are such a huge chunk of a business’s operating expenses, you’d be crazy not to price out your options at least every few years. You might be surprised by the money you could save by switching providers or plans. There are many independent insurance brokers out there that will help you price out your options for free. Also, make sure your benefits package is competitive with similar employers; otherwise, you could start losing employees to the competition.

Client, customer and employee appreciation. Don’t let the year end without showing your appreciation to your best clients and customers. Mail or personally deliver holiday cards and gifts to those that have helped your business in some way this year. It doesn’t have to be a lavish gift basket or expensive wine, just something you know they’ll appreciate and remember getting from you as a way to say “thanks.” And don’t forget your most important resource: your employees. Whether it’s a year-end bonus or a holiday party/dinner to say thank you, make sure your employees know that everything they have done throughout the year for the company did not go unnoticed.

Do a human resources audit. Unless you’re lucky enough to have an experienced and fully versed HR staff, you’re probably not up on all the latest compliance laws regarding employees. Be proactive and consult with an outside human resources professional about your employee issues and hiring policies. All it takes is one unhappy and litigious ex-employee, and you’ve got a lawsuit on your hands. While you’re at it, consider conducting an employee survey to measure job satisfaction. Make sure all comments are anonymous to invite more candid feedback or hire an outside consultant to perform it for you. From the results, you should be able to figure out what you’re doing well and opportunities that exist for improvement. You can’t fix what you don’t know is broken.

Assess equipment and services. Make sure your office equipment, supplies and services like phone and Internet are still meeting your needs. Have you outgrown your copier or Internet service? Do you need to upgrade your software to a newer version? Do you have some equipment that seems to be costing more to maintain and fix than it would be to just buy a new one? Also, if you’re thinking about buying new accounting software, the best time to do it is right at the beginning of your fiscal year. That way, there are fewer things to migrate to the new system.

Check and update all company information. Be sure you have current addresses, phone numbers and emergency contact information from every one of your employees. People move and phone numbers change all the time, and often you don’t find out the information you have is wrong until something unexpected happens. Plus, that information will come in handy in January to make sure W-2s and 1099s find their way to the right people.

Check and update marketing information. Is your phone, fax, email and address information correct on everything from your letterhead and directory ads to your website? If not, you’re making it awfully difficult for customers to find you. Test all the links on your website, and make sure any contact or help emails are being delivered (and to the right people).

Plan for next year. It’s hard to get where you want to go if you don’t know how you’re going to get there. Analyze your business’ strengths, weaknesses, opportunities and threats (SWOT), and then set goals and develop a business or strategic plan for the coming year. Establish some milestones to reach along the way to help you achieve and realize these goals. Make sure all of your employees understand where the company is headed and what they can do to help you reach these goals.

If this was your first year in business, this checklist may take longer for you than others. Ideally, you’d have time to do this every quarter so December doesn’t completely overwhelm you. But if you can take care of this general list, plus anything specifically related to your industry, before the New Year starts, you’ll be able to get 2010 off on the right foot rather than cleaning up last year’s messes.

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