Here we are entering the final days of 2019, and while there is so much to keep up with, it is easy to forget that you need to work on your business as well as in your business. Now is a great time to step back and review where your business stands for the year and see what strategies you can implement before year end.
Where does your business stand year-to-date compared to the prior year? A side by side comparison of the Profit and Loss statement will provide some insight on how the business is operating. Is revenue up or down from the prior year? Why? Have certain vendor costs increased and if so, why? This report will provide some necessary questions for a business owner to explore. If revenue is down for the year, was there a specific event that caused this decrease? Do you have a plan for the fourth quarter to meet your annual revenue goals? Understanding this and planning for it now as opposed to mid or late December is critical. As important as it is to understand changes in your revenue, understanding changes in your expenses is just as important. For example, if the cost of a certain vendor has significantly increased from the prior year, it is important understand what caused the increase. Is that vendor performing additional services or spending more time on your account? There may be a good reason for certain increases but the key is to understand why and mitigate them in real time.
In addition to analyzing the operations of a business, it is important to plan and be prepared for year-end filing requirements to keep your business in compliance. A big area of compliance is Form 1099 filing. Do you have all the necessary W-9s on file to issue 1099s at year end? Do you know which of your vendors qualify for Form 1099? This can be a complex area that is often overlooked. See our newsletter from last month that explores some of the complexities surrounding Form 1099s. Looking at this now can save you time and headaches down the road as it gets closer to the filing deadline.
Last but certainly not least is planning for income tax purposes. Can you forecast out what sales will be for the fourth quarter? Does it make sense to purchase that needed piece of equipment now in order to reduce taxable income? Would it make sense to buy inventory material or supplies before year end to not only reduce taxable income but take advantage of competitive pricing now? These are just a few of the many questions that should be considered now as we enter fourth quarter.
Planning is critical for the success of any business. The professionals at Stephano Slack LLC know just how important it is and are here to help you plan for what is ahead.