By Sherry Lutz Herrington
I can’t believe it’s October already. This year has gone twice as fast as 2020 did. Although I am grateful that life has improved in a myriad of ways, I know we are not really out of the pandemic yet. We may not have achieved a stable new normal yet. Many businesses are still dealing with changes in mandates and operations due to the ongoing surges in COVID-19 cases.
Despite all that, life is continuing on.
We humans are resilient. We keep moving forward despite difficult (if not nearly impossible) circumstances. So here we are, hurtling toward the end of 2021.
What does that mean? In the business world, it means getting ready for 2022.
And what does that mean? It means making sure your financials are up-to-date and accurate for all of 2021. Taxes will need to be prepared and filed shortly after the beginning of the new year. Your records need to be ready.
It also means setting goals and making plans for next year.
Sometimes, getting ready to file your taxes involves making decisions before the end of the fiscal year about whether to spend capital on improving the company. If you have had an exceptionally good year, it may be in your best interest to spend money this year. You could benefit taxwise from purchasing additional assets such as vehicles or equipment. You could also benefit from buying extra inventory to have on hand for the coming year. It might mean moving to a larger location, so you are set up now to take on the anticipated growth.
If you are struggling to keep staff because of the high demand in your industry, evaluate if you can afford to give raises or add new perks for the new year. Deciding if and how much you can afford to pay in end-of-year bonuses would be wise. Investing in valued employees is always a good idea. In the long run you save money by retaining quality staff rather than having to replace them.
Whatever the type of business you are running or the state of your finances, the last quarter of the year is a good time to look ahead and make decisions about the future.
The other piece, of course, is planning financially for the next year.
Do you anticipate a slow down? More growth? A change in your industry that could impact your success?
Use that data, as well as current year financials, to start a rough draft of your annual budget. Getting your budget set up early will help you enter the new year with confidence.
Knowing where you are going and how you are going to get there is paramount to your success.
Evaluating where your business is likely to change will help you plan strategically. Looking forward can help you make decisions about investing now in additional resources for your business as well as maximizing your tax advantages. It can also help set you up for a more successful new year.
Don’t wait until the new year is here to start thinking about it and planning. The fourth quarter of the year is the latest that your planning should begin. Take the time now to review what has happened during this current year so far, what you anticipate happening in the next year, and how to combine all that information to make decisions now.
Taking time to plan will not only make the rush of completing your end-of-year responsibilities easier, but it will also make the launch of the new year smoother.
Remember, strategic planning is your road map to success. Laying out your course and knowing how you are going to accomplish your goals will lead to a less stressful and more amazing 2022.
Sherry Lutz Herrington is the owner of Sherrington Financial Fitness, a business consulting and accounting firm specializing in strategic business planning and solid financial accounting for businesses. She is also the author of Strong Women Thriving (https://strongwomenthriving.com/), a blog which focuses on empowering women to be financially savvy, particularly after experiencing financial abuse. Sherry is currently writing a new book that both shares her personal story and addresses financial abuse. She can be reached at firstname.lastname@example.org.