Without a bookkeeping service or accounting service in place, established businesses tend to become slack in routinely checking the financial details of their business operations over time. Everything seems to be sailing along smoothly, and day-to-day operation become the main focal point. The big financial picture often falls to the wayside until a glaringly obvious problem emerges and becomes a huge liability or possible door closer. Don’t allow poor financial health to sneak up and cause such chaos.
With tax season here, it’s the perfect time to perform an annual company checkup. This allows businesses to look at the big picture of their financial health, which allows many problems to be identified and corrected in the early stages. Here are four checkmarks to include in an annual financial health check.
1. Employee Benefit Review
Depending on the business’s size, employee benefits can be a large slice of a company’s financial pie. Assess all employee benefits offered, such as:
•Dental and vision
Are each of the offerings the most cost effective package available? Does the company’s financials mean better benefits can be offered to attract new hires and retain the health and well-being of existing employees? If yes, realize that both benefit the company’s long-term picture and should be considered. Work with the company accountant or bookkeeping service to run a multitude of scenarios and numbers to see if it’s a beneficial, prudent move.
2. Explore Potential Rebates, Refunds, And Deductions
There are typically one to many types of the above that San Diego small businesses have available to them; it’s usually just a matter of looking to find them and understanding how each can be beneficial to the company.
Neglecting rebates, refunds, and deductions can be a very costly overlook considering the array of areas they can save/earn tax dollars for a business. Work with a professional accountant or bookkeeper to determine if caveats like equipment depreciation or upgrades, certain salaries, or even employee mileage reimbursement can offer a tax benefit.
3. Short-Term And Long-Term Financial Alignment
A bookkeeping service or accounting service can be instrumental in helping to determine if a company’s current finances are congruent with its long-term, big picture financial goals. It’s only logical that a company must consider both for success.
After all, it’s the current financial situation that eventually takes a San Diego company closer or further away from long-term goals like opening secondary locations, upgrading a location, creating new in-house departments, or even earning a certain net income each month.
Business owners must have a firm grasp of both their long-term and short-term financial goals and a clear picture of their current financial standing. As annual financial reviews take place, this is the time to determine congruency and look for any means to shorten the distance between those long-term goals and the current financial standing.
4. Keep Personal Finances In Mind
Just as it’s tax time for San Diego small businesses, it’s also time for personal taxes. Don’t neglect them. Poor personal finances have a way of trickling over to blur a business’s financial health. In closing, small business owners often find themselves doubling down as the accountant or bookkeeper for their business, especially in the early stages of success. It’s of the upmost importance to keep precise and timely information to avoid a tax disaster. If it becomes a time constraint to daily operations or there are frequent oversights, strongly consider outsourcing bookkeeping services or accounting services to a professional.