Ho Ho Ho! The holiday season is right around the corner.
While the holidays bring a very merry and joyous time of the year, you can also feel quite stressed with accounting backlogs and unprepared books.
Well, it’s the busiest time of the year as you have to prepare for year-end financials. But are your financial reports audit-ready for a smooth start to the new year?
If not, it’s a perfect time to catch up and clean up books, optimize processes, and respond to change for tackling operational challenges ahead.
How to Get Your Small Business Ready for Holidays
Here are 5 tips to prepare your small business for the holiday rush and ensure you’re able to ring in the new year with ease.
Analyze Cash Flow
Nobody knows your business as well as you do. So, before the holidays arrive, you should analyze what your business did in the fourth quarter of 2021 and 2022. As you review, identify the days that you navigated easily and those that presented challenges. With this information in mind, you set the tone for a successful 2023.
If you are already tight with cash flow, which is obvious when receivables are slower than payables, you must stay on top of who owes you money. Yes…BE PROACTIVE, BE THE SQUEAKY WHEEL. This is only possible when receipts are recorded accurately in the accounting system.
If you don’t have AP clerk in-house to take care of invoicing customers, tracking payments, following up on unpaid bills, cash and bank reconciliation, performing customer credit checks, and more, hire an extended team to handle some or all the accounts receivable functions.
Streamline Inventory Management
This is a critical aspect as overstock or out-of-stock can quickly turn a festive season into a nightmare. The last thing you want is to lose customers as you don’t have enough stock to fulfill their demands. So, to get a piece of the pie, you need to step into the holiday season with the utmost preparation and sufficient inventory to carry you through it.
“Determine what your customers need and work backwards.” – Jeff Bezos
Forecast demand accurately, analyze sales trends, and order extra supplies ahead of time, so you don’t have to worry about stock and logistics. At the same time, you need to prepare to hold excess stock and plan for selling it as early as possible.
But how to plan and strike a balance for eliminating the operational cost burden? Streamline inventory process by deploying the best outsourced accounting practices and leveraging advanced technology.
Your outsourced accounting partner tracks and allocates inventory-related costs and provides detailed inventory information in financial statements and analyzes inventory turnover ratios to better manage inventory.
Prepare a Closing Schedule
Over the years, we have seen that small businesses want to take a well-deserved break for family and friends. But before they close business for the holiday season, they want to get relieved from year-end closing.
Of course, you also don’t want to think of year-end closing during the festive season. Nor do you have enough time to identify activities that must be completed for annual 1099 filings and yearly audit. So, what’s the way to tick this? Outsource!
The outsourced accounting service providers identify pending tasks, record them, and prepare schedules with target dates to avoid missing any crucial deadlines. They will record month-end General Ledgers (GLs), prepare financial statements, and generate reports to ensure seamless fiscal close.
Gather Outstanding Invoices & Receipts
As the financial year is about to end, closing books is paramount. Gathering outstanding invoices and receipts is crucial for reconciling accounts receivable and payable. However, delays are obvious when relying solely on internal staff. Your staff need to understand what’s required and require ample time to submit documents.
To speed up this process, you need an extended team that will record all outstanding invoices and receipts in your accounting software, facilitating a smoother year-end closing.
Reconcile All Transactions
Each year, small businesses should conduct an end-of-year reconciliation to match recorded transactions with credit card statements, bank statements, invoices and receipts. It’s usually done as a closing entry to ensure that the business remains compliant with laws and regulations, and you have complete visibility of financial health over the year.
Finish the Year Strong
With the above tips, you’re off to a great start. And it gets even better with a rewarding outsourced accounting partnership. The extended team of expert bookkeepers takes the financial load off, letting you focus on growth. Also, this helps your in-house team close faster, save time year-round, make informed decisions, and have greater control.
In a nutshell, the secret to a smoother financial close is to outsource, enabling you to have well-prepared, streamlined, and proactive processes throughout the accounting year.
