Year-End Checklist for Small Business Owners

Generally speaking, I'm not a fan of arbitrary deadlines and milestones. If you really want to quit smoking, why wait until January 1st when you can start changing your life today? I feel the same when it comes to business matters – why wait for next year to pursue your goals when you can start making progress now?

That said, there are some practical reasons why the end of the year can be crucial for business owners – and yes, most of it has to do with taxes. One of the benefits we have as business owners is the opportunity to write off the investments we make in our businesses. So, while you're enjoying the slow time between Christmas and the New Year, here are a few things you can do from the couch to start 2019 off right.

Check Your Cash Flow

Defer income and accelerate expenses. This one is pretty basic, but a lot of business owners don't even think about it strategically: If you file your tax returns on the cash basis (as most small business owners do), the more cash you receive the more taxes you'll have to pay. Conversely, the more cash you pay the less taxes you'll owe. So, unless you're hard up for cash, you may want to hold off on sending out a few of your outstanding invoices until next year. Only use this with customers with solid payment histories (!!).

On the flip side, if you are able to make any payments or investments, do it now. Your vendors will love you. We love being paid on time – or early! And this gives you the opportunity to maximize your deductions. Over time, it all comes out the same, but checking in on your cash flow now may help you save on your 2018 tax bill. You'll thank yourself in April.

I started my entrepreneurial journey as a professional organizer. I had a lot of smart clients take advantage of this kind of thinking. They knew they wanted to start with me in January, but they'd pay me in December, which 1) secured their spot and 2) gave them a tax write-off. Here are a few other examples:

• Already know you're redoing your website next year? Shoot over a deposit to your web designer.
• Meet with a bookkeeper or accountant.
• Planning on hiring a coach or consultant? Pay for next month (or the entire year) now.
• Have a service you've been paying for monthly? Upgrade to an annual subscription now. You usually save on annual vs. monthly payments, many companies offer year end discounts, and you'll get that write off. It's really a win-win: Your business is set up properly throughout the year next year, but you get to reap the tax benefits this year.
• Review your bills that aren’t due until January. Pay them with checks and mail them a few days before year’s end. I don't even have checks, so this one's not for me. BUT, the tax rules say you can deduct these expenses in the year you mail the check. If you need proof you mailed the check this year (or if its a big expenses), send it via certified or registered mail.
• Educational material, including online courses, can also count as write-offs. Just make sure you purchase the material/training/course before the end of the year, even if you don’t plan to use it until next year.

Don't spend carelessly in hopes of getting deductions. Be smart about it.

Note: These techniques may not work if you use the accrual method. Tax to a tax professional if you're unsure of what to do.

Organize Your Business

For years, I've preached the value of having the five essential systems in place. There are two primary benefits to this, especially at year-end:

• You'll start 2019 feeling more organized and prepared
• You can take a write off for any services and investments you make now

So, if you've been hesitating on organizing your business, make that investment in yourself now. This goes beyond tech systems and services. You can also organize your business by:

• Evaluating your technology – is it time for a new computer, tablet or printer? Buy the equipment you need and take advantage of year-end sales.
• Hiring a professional organizer or business consultant. If you need help organizing your operations, systems, workflows or any of that fun stuff (wink wink), check out my services.

On the other side of things, this is also your chance to review what you've paid for this year. Cancel any services that you didn't use or that weren't valuable. We waste tons of money on subscriptions we don't use. Your money is better invested elsewhere.

Donate

If you itemize your deductions, you'll lower your income taxes by donating to charity by the end of the year. I'm a big fan of charitable giving for the sake of giving. But, you know what, even if you do it to get a write-off, the causes you donate to still benefit. You can probably check your inbox and find year-end donation requests from organizations you've supported in the past. You can donate money, property, or both, to any qualified charity and take a deduction. Get on this fast – one year, I did wait to donate until December 31st but because it fell on a weekend, my payment actually wasn't processed until the following year. The charity still benefited, I just missed out on the write off for that year.

Plan for the Year Ahead

On January 1, its common to set goals and resolutions for the year. But I encourage you to get a jump on that now. If you're feeling like you need a process to help you along, check out my Goal Planning Guide.

• Do a review of your year. What were your wins, challenges and lessons learned?
• Set next year's goals.
• Make a plan for next year – include whatever is important to you. If you're planning to hire, start thinking of who you need on your team. If you're going to offer new services or products, start planning the milestones and deadlines.
• Get a planner or calendar in place – I personally use both a paper planner and a Google Calendar. You do what's best for you. If you're going the paper route, here's my list of best planners for small business owners.

Here's to a great 2019!