Strategizing your end-of-year company finances


And just like that, 2016 is nearing its close. (Where does that time go?) As we come into the fourth quarter, now is the time of the year to strategize your business and personal finances to make the most out of the calendar year. Here are some key items that you should discuss with your accountant or financial strategist as we head into the final stretch of the year. 

Start your projections now

Now is the right time to start running key reports to check where you are with the financial health of your business. This means looking at your profit and loss statement (aka P&L or income statement),  balance sheet, and cash flow reports. Working out these numbers early on will help you to determine the best way to allocate the rest of the year’s spend. 

For example, if you’ve had an especially profitable year, you may want to minimize your 2016 tax bill by paying off expenses early or increasing tax-deductible contributions. Or if you’re in the process of courting investors or applying for additional capital, you may want to prioritize paying down the liabilities from your balance sheet, such as secured loans or high-interest lines of credit. This can help make your balance sheet look healthier and improve important asset-to-liability ratios. 

Requesting your year-end projections now will also help you to evaluate your current relationship with your accountant to see if their recommendations align with your strategic goals. If you are currently unhappy with your accountant, it’s better to know now and make a switch, rather than waiting until the end of the year. 

Strategize your year-end contributions

Now is also the time to start allocating tax-deductible contributions that need to be funded before the end of the year. This includes funding an IRA or SEP-IRA account, 401k deferrals and employer contributions, or health savings accounts (HSAs), as well as any charitable donations to 501(c)(3) organizations. If you have children, you may also consider funding a 529 College Savings Plan, for which you may receive a full or partial state tax deduction (but not federal). 

Improve your employee benefit packages 

We advise clients to set the goal of improving employee benefit packages on a yearly basis. This adds meaningful value to your employee compensation at very incremental costs, and can help offset the lack of a holiday cash bonus if your company cannot afford it at the moment. 

This can mean adding vision/dental to your company’s health plans, offering long-term disability insurance, or offering a transit card plan. You can also get creative with the perks—for example, REI offers two paid “Yay Days” per year for employees to enjoy their favorite outside activity, while Airbnb pays an annual travel stipend of $2,000 to stay at any Airbnb listing in the world. Other attractive benefits include stipends for gyms or fitness classes, paid time off for community service, and child care reimbursements. 

Get organized with all your admin work

This includes reviewing insurance policies and vendor contracts, going through accounts receivable to follow up on outstanding invoices, and updating any internal employee policies or cyber security policies. We’ve put together a checklist here for the admin team.