Building Dreams | Navigating your business ambitions
The end of the year is approaching, making it an opportune time for business owners to reflect on their successes and strategize for 2023. When doing a business review, there are several things to keep in mind.
- Simplify your accounting and bookkeeping. Having a personal checking account and using it for a business means business and personal finances are comingled. That can make accounting and bookkeeping more complicated and getting accurate financial statements difficult. If you don’t already use separate accounts or credit cards for the business, take time to research your options and speak with a banker before 2023.
- Review and renew your goals. As with every aspect of their operations, business owners should set annual cash management goals. Review your annual projections to identify if you have hit goals and what drove performance or prevented you from achieving them. Next, set cash-management objectives for 2023 by use: operating budget, short-term liquidity (needed within 30 days) or long-term liquidity (needed in 30+ days).
- Meet with your financial professional and strategize whether there are capital improvements or interest-bearing solutions to offset expenses from retained earnings and create savings for the company.
- Review any outstanding Accounts Receivables to close out in the current fiscal year. Also identify the average payables time and consider whether the business needs to change its terms to shorten the timeframe between outflows and inflows of cash.
- Identify if you need a loan or line of credit in the new year. Meet with a banker to determine what the business needs to do prior to applying for new or increased credit.