Key Takeaways
- Gather and reconcile records, then review key financial reports.
- Set clear goals and block focused time for your review.
- Compare results to expectations and note major trends.
- Use your insights to set goals and build next year’s budget.
Year-end is an ideal time to review your business finances. Follow these steps to set yourself up for a strong start in the new year.
Gather Your Records
Your year-end records accurately show how your company performed, revealing areas where the business excels and those that need improvement. Start by pulling together financial records, including up-to-date and reconciled bank account, accounts payable and accounts receivable records. Next, pull reports that will help you analyze how your business fared this year. Use your accounting software to produce reports including:
- Income statement – breaks down income and expenses to show profit
- Balance sheet – lists assets, liabilities, and equity
- Cash flow statement – shows cash moving in and out over the year
Set Aside Time and Set Expectations
Decide what you want to achieve with your review. Consider questions like:
- Did we earn a profit this year? What areas were most successful?
- Was cash flow sufficient to handle fluctuations?
- How did actual results compare to budget projections? Were we able to handle unanticipated expenses?
- Where did we deviate from plans?
Set aside dedicated time, either in one session or several blocks, to conduct your review without distractions.
Conduct Your Review
Follow your agenda, review the numbers, and bring in a trusted advisor if helpful. Consider the results in the context of decisions made, the broader economy, and local market conditions. Understanding why your business performed as it did will guide future planning.
What’s Next?
Now that you have a clear understanding of your company’s financial health, you can set plans for next year and beyond. Start with overall goals, then create a budget based on your analysis. At Lake City Bank, we’re here to help. Drop in to one of our branch offices or call our One Call Center at (888) 522-2265.
