Picture3As a virtual accountant I work with clients who are concerned about their business’s numbers on a daily basis. We urge our clients to look at their financials on a monthly basis, but if you don’t you certainly want to now that the end of the year is looming.

Entrepreneurs need to understand the financial position of their business for the past year in order to end 2013 well and plan properly for the year ahead. If you don’t understand what has happened, you can’t possibly make adjustments.

Here are my tips for reviewing your business’s financial story:

  • Review your profit and loss statement and monthly trend reports. Ask your accountant for help in reading them if you don’t understand them. Data is useless if you don’t know how to use it!
  • Review your reports and make adjustments in your business, if necessary, to correct course. Look for items on your profit and loss statement that simply didn’t live up to expectations. Is there something you can do to change those items (whether it’s a good or a service)? Is it better for your finances to jettison them or can you change up the pricing or delivery to make them more profitable?
  • Does the money you spend in various portions of your business match up with the results reaped? If you’re spending X amount of dollars on pay-per-click advertising and it’s not at least bringing in what you’ve spent, is it a viable method of advertising for your business?
  • Send your reports and projected income and expense to your CPA for a pre-yearend tax review. This will insure that you don’t pay more taxes than you have to and that you are in compliance with the key areas that the IRS looks at.

Take time now to review your finances so that you end 2013 well!

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