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Four Financial Steps To Take Before The End Of The Year

As the year draws close, small and medium businesses face many activities. Among these, planning your financials is an important task that sets the stage for the upcoming year.



The end-of-year financial checklist is more than just a routine. It’s an opportunity to lay a robust foundation for the next year’s success.

1. Forecast for the Next Year

The first step is creating a forecast for the upcoming year. This doesn’t have to be a detailed budget but a well-constructed forecast acting as a guiding light for decision-making through 2024. Start with an Income Statement forecast. This gives you a bird’s-eye view of your finances for each quarter of the next year.

Incorporate potential industry disruptors and personal business challenges in your forecast. Don’t overlook technology investments and their impact in terms of cost and potential operational savings. Also, prepare a Balance Sheet forecast. This is important because certain expenditures affect your Balance Sheet directly.

Building a forecast now is a proactive move. It’s a valuable tool for tracking your progress and making timely adjustments, whether to capitalize on unexpected successes or to address shortfalls.

2. Identify Key Metrics to Track

Your forecast will naturally lead you to the key metrics you need to track. These metrics are not just numbers. They’re indicators of your business’s health and progress toward its goals. Reflect on the past year. Which metrics were most helpful in guiding your business?

These could range from sales cycle length to inventory turnover or budget variance. The right metrics for your business depend on where you’ve seen success or challenges so far. Focusing on these metrics lets you keep a pulse on your business’s performance throughout the year.

3. Strategic Investment Planning

With your critical metrics in place, the next step is determining where to invest in your business. These investments should align with both your immediate and long-term goals. Whether upgrading equipment, expanding your team, or enhancing your marketing efforts, your investment decisions should be part of a long-term spending plan. This approach helps maintain budget discipline and ensures you are on track to achieve your business objectives.

4. Assess Your Tax Liability

A common oversight for many businesses is underestimating their tax liability. This can derail your financial plans for the upcoming year. Work with your financial team or accountant to estimate your tax liability accurately. This foresight is essential for managing your cash flow and spending effectively in the new year.

Ensure your 2023 books, especially the Balance Sheet, are in order before the year ends. Stepping into 2024 with unresolved financial issues can hinder your progress.

Planning for Success

Creating a comprehensive plan for the next year can be daunting, especially when you’re caught up in daily operations. This is where the expertise of an Outsourced or fractional CFO can be invaluable. Our Outsourced CFOs at Notion CFO and Advisors bring diverse industry experience, providing the strategic guidance necessary to steer your business toward its goals.

The end of the year is not just a period of closing accounts. It’s a strategic phase for planning and positioning your business for a prosperous new year. Taking these financial steps now can ensure that you start 2024 on a strong and confident note.

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