New Business Direction LLC
As we prepare to wrap up 2024, there’s no better way to set the stage for a successful new year than by finishing strong. A smooth year-end close not only gives you peace of mind but also sets you up to hit the ground running in 2025.
Here’s a comprehensive checklist to help you organize and streamline your year-end close. And remember, if any of these tasks seem daunting, we’re just an email away to assist!
Financial Tasks
- Catch up on your bookkeeping. If you’ve been putting this off, now’s the time to get your books in order to avoid the rush of tax season.
- Reconcile all bank accounts. Include savings accounts, PayPal, credit cards, and cash equivalents. Review old uncleared checks, void or re-issue, as necessary.
- Review and address unpaid invoices. Collect outstanding invoices from customers and clean up any errors in accounts receivable.
- Write off uncollectible invoices. Prepare your books for a realistic reflection of revenue.
- Record all bills due through year-end. Reconcile your accounts payable and ensure balances are accurate.
Payroll and Contractor Preparations
- Update employee and vendor addresses. Ensure accurate W-2s and 1099s by confirming everyone’s information is up to date.
- Gather W-9s from contractors. This simplifies your 1099 filing process.
- Request proof of workers’ compensation insurance. Avoid extra charges by collecting certificates from applicable contractors.
- Decide on year-end employee bonuses. Remember, these payments are subject to withholding taxes.
- Review PTO balances. Adjust or roll over unused days in your payroll system.
Inventory Management
- Schedule and take inventory. Make necessary adjustments to your books after counting.
- Write off unsellable inventory. If possible, sell scrap inventory or waste to recover costs.
Assets and Liabilities
- Update your fixed assets register. Confirm that you still own all of the assets listed on your depreciation schedule.
- Calculate and record depreciation as needed.
- Adjust loans for interest and principal allocations. (Need help accurately recording business loans? Check out this tutorial from our team.)
- Analyze all balance sheet accounts. Ensure all balances are current and accurate.
Tax Preparation and Strategy
- Plan your deductions. Decide whether to maximize deductions or defer income for optimal tax impact.
- Prepare for tax adjustments. Work with your accountant to ensure all entries and reconciliations are complete.
Recordkeeping and Organization
- Ensure a complete paper trail. Match transactions with receipts, invoices, and other documents.
- Digitize and store records. Scan and securely save important documents like bank statements, payroll reports, and contracts. (If you’re still operating your business using a local server to store your data, we wrote a think piece about why you should consider switching to cloud-based storage)
Strategic Planning for 2025
- Create a revenue and profit plan. Enter your 2025 goals into your accounting system. (Need help determining where your revenue should come from in 2025? Check out our article about three different sources of cashflow. Need to find out if your growth strategy actually optimizes your profits? Check out this tutorial we wrote.)
- Review holiday closures. Share your 2025 holiday schedule with your team.
- Update pricing. Adjust product and service prices if this is your annual review period.
- Review key metrics. Decide which performance indicators will guide your success in 2025.
Celebrate and Reflect
As you complete this checklist, take time to celebrate your accomplishments from 2024. Reflect on what went well and set your sights on an even better 2025. If you need help with any of these tasks, we’re here to make the process easier. Let’s close the year with confidence and start the new one with excitement!
As a business coach, I’ve often witnessed the power of familial bonds in the world of entrepreneurship. One strategy that has shown immense potential for both the business and the family is hiring children within the business. While some may raise eyebrows at the idea, there are numerous benefits to be reaped from such a decision, ranging from financial advantages to fostering a sense of responsibility and entrepreneurship in the younger generation.
Two Financial Benefits of Hiring Your Children in Your Business
Hiring your children and offering them a salary can be a mutually beneficial scenario, financially speaking:
- Salary Expenses: Instead of handing out allowances, you can pay them a reasonable wage for the work they do. The IRS allows business owners to deduct reasonable wages paid to their children as a business expense.
- Tax Advantages: Hiring your children can also offer tax advantages for both parties. Children can earn up to a certain amount (subject to change, so consulting a tax professional is advisable) without paying federal income tax. For the business, wages paid to children are deductible as a business expense, reducing the overall taxable income.
Tax Exemptions and Retirement Benefits Associated with Hiring Your Children
As a business owner, it’s also important to understand the potential tax benefits of providing certain benefits to your employees, including family members. In particular, offering retirement planning as a benefit to your children can both introduce them to the concept of saving early on and yield tax advantages for your family. Let’s get into the details:
Tax Exemptions for Certain Benefits: Depending on the structure of your business and the tax laws in your jurisdiction, certain benefits provided to employees, including your children, may be tax-exempt. This could include health insurance premiums or contributions to retirement plans.
Retirement Planning as a Benefit: By hiring your children, you can also introduce them to the concept of retirement savings early on. You may establish retirement accounts, such as a Roth IRA, and contribute a portion of their earnings. This not only helps them start saving for their future but also reduces the family’s overall tax liability.
Three Final Benefits of Hiring Your Children within Your Small Business
Hiring your children can reap benefits beyond providing you and them financial and tax-savings benefits. This decision can also offer them a meaningful learning opportunity and set the stage for their future success, both professionally and financially. Here are three final benefits of hiring your children within your small business:
- Hiring your children provides them with a learning opportunity: Working in the family business provides invaluable real-world experience for children. They learn important skills such as communication, teamwork, problem-solving, and financial literacy, all of which are crucial for their future endeavors.
- Hiring your children creates an opportunity for family bonding: Working together can strengthen family bonds and create shared experiences. It provides an opportunity for open communication and mutual understanding between generations, fostering a sense of unity and purpose within the family.
- Hiring your children allows for proactive succession planning: Hiring children can be a strategic move for succession planning. It allows them to gain firsthand experience and knowledge of the business, preparing them to take on leadership roles in the future.
Ultimately, hiring your children in your business can be a win-win situation for both the family and the business. This business strategy offers financial benefits, tax advantages, and valuable learning opportunities while fostering a strong sense of family unity and preparing the next generation for future success.
However, it’s essential to approach this decision thoughtfully and in compliance with all legal and tax regulations. Consulting with a qualified tax advisor or financial planner is a great way to navigate the complexities–and maximize the benefits–of this arrangement.
As a business coach, one of the fundamental lessons I impart to my customers is the vital importance of cash flow management. Cash flow is the lifeblood of any business, and understanding the primary avenues through which cash is generated can make the difference between thriving and merely surviving. There are essentially three ways to generate cash for your business: through operations, financing, and investing. Let’s delve into each of these in more detail.
1. Cash from Operations: Doing What You Do Best
Generating cash from operations is the most sustainable and preferable method for a business. It involves the day-to-day activities that your business engages in to generate revenue. Your operations cash flow is like the engine room of your enterprise, where the core products or services are created, marketed, and sold.
The key business priorities for generating cash from your operations include the following:
- Generating revenue: This includes sales of goods or services. Consistently increasing sales while managing expenses effectively is crucial.
- Managing expenses: Controlling operating expenses ensures that more of your revenue is converted into profit.
- Improving efficiency: Streamlining operations can reduce costs and improve productivity, in turn boosting cash flow.
Prioritizing operational cash flow is vital to a successful business because it indicates a healthy, self-sustaining enterprise. Managing the above priorities while enhancing customer experience, optimizing pricing strategies, and continuously improving product or service quality will drive your operational cash flow.
2. Cash from Financing: Leveraging Debt and Equity
The second avenue of generating cash flow is financing, which involves borrowing money or raising funds from investors. While less ideal than generating cash from operations, financing is sometimes necessary to support growth, manage working capital, or navigate challenging times.
There are two primary types of financing:
- Debt Financing: This includes taking out loans or issuing bonds. While debt must be repaid with interest, it can provide immediate funds for expansion at a critical time for growth (or other needs).
- Equity Financing: Selling shares of your company to investors in exchange for capital. This doesn’t require repayment but does dilute ownership.
Financing can be a double-edged sword; it can provide the necessary capital to seize growth opportunities, but it also comes with risks, such as interest obligations and potential loss of control. A sound financing strategy should balance these risks, ensuring that debt levels remain manageable and that equity is only diluted when it aligns with long-term goals.
2. Cash from Investments: Selling Assets
The third method is generating cash by liquidating investments you’ve made for your business. This strategy can include selling off assets, such as equipment, real estate, or even entire business units that are no longer core to your business strategy.
Below are three critical considerations for your investing activities:
- Asset Management: Regularly review your asset portfolio to identify non-essential or underperforming assets.
- Strategic Sales: Consider selling non-core assets to free up capital, which can be reinvested in higher-return areas of your business.
- Investment Income: Earning returns from financial investments can also contribute to cash flow.
This method can provide a significant influx of cash but should be approached cautiously. It’s essential to ensure that selling assets aligns with your long-term strategic goals and doesn’t undermine your operational capabilities.
Balancing your Cash Flow Sources
Each of these three sources of revenue has its place in a comprehensive cash flow strategy. Remember, cash from operations is most reliable, and wisely leveraging financing can support growth and stability. At the same time, strategic asset sales can optimize resource allocation. All three avenues can help your business grow and remain stable. Strategically integrating these three methods of generating cash could look like this:
- Optimizing your operations to boost cash flow by improving efficiency and controlling costs.
- Seeking financing to invest in new technology to expand your capacity to produce
- Selling outdated equipment to raise additional funds.
As your business coach, my goal is to help you navigate these avenues effectively, ensuring your business can not only survive but thrive in any economic climate. As always, if you have any questions or want to learn more about cash flow management services for your business, please feel free to contact us anytime.
Implementing a new accounting system is no small feat. It requires careful planning, coordination, and commitment from every team member. We’re always excited to help a business with a new accounting infrastructure implementation because we know the positive impact it can have on a business.
We also understand that, as a business owner, transitioning to a new software solution can be both exciting and daunting. You’re taking a giant leap in a positive direction to increase your efficiency, enhance the functionality of your accounting system, and optimize your processes.
But great reward doesn’t come without some risk: you’ve likely already considered employee learning curves, potential technical challenges during the transition period, and how a new implementation could disrupt daily operations. These concerns are valid, and with the right expectations, the journey can be smoother and more rewarding for everyone involved.
Hard Work Ahead: Embracing the Challenge
Let’s be honest: implementing a new accounting system isn’t a walk in the park. It requires time, effort, and resources to ensure a successful transition. From data migration to process reengineering, numerous tasks need to be completed with precision and attention to detail. It’s a journey that will test the resilience and determination of the entire team.
Rowing in the Same Direction: Unity in Purpose
Implementing a new accounting system requires a collective effort from your entire team. Everyone on board must be rowing in the same direction; if you notice team members resisting the change, it’s best to address the issue head-on. Ultimately, the goal is not to make their jobs harder; it’s to improve their workflows and processes in the future by putting in the hard work now. And for your implementation to be as successful and pain-free as possible, every team member must be ready to embrace change, adapt to new processes, and support one another throughout the transition. With a company culture of collaboration and communication, we can overcome any challenges that come our way while implementing your new accounting infrastructure.
Charting the Course: Milestones and Deadlines
Like any major project, implementing a new accounting system involves setting milestones and deadlines to keep the team on track. These milestones serve as checkpoints to assess progress and make necessary adjustments along the way. Whether we’re completing data migration or conducting one-on-one training with your team, each milestone brings us one step closer to our ultimate goal: to give you a beautiful accounting infrastructure that meets your current business needs and still leaves room for growth.
Bringing It All Together: The “Go Live” Date
The “go live” date is the culmination of your months of hard work and preparation. It’s the moment when the new accounting system officially replaces the old one, and all systems are a go! Reaching this milestone involves coordinating a multitude of moving parts, from finalizing configurations to conducting system testing. Everyone needs to be aligned and working together towards this common goal.
Embracing Differences
Transitioning to a new accounting system inevitably brings about comparisons between the old and the new. From software functionalities to workflow processes, there will be changes that require adjustment and adaptation. It’s important to acknowledge these differences and approach them with an open mind and a willingness to learn. We wouldn’t be guiding you through an implementation if we didn’t already understand your business’s unique needs and believe we were charting the best path forward for you. With the right mindset, we can turn the differences between your former and future accounting systems into opportunities for growth and improvement.
Implementing a new accounting system is a significant undertaking that requires dedication, perseverance, and teamwork. By setting clear expectations and rallying the team around a common goal, we can confidently navigate this journey and achieve success. You can learn more about our implementation services here.
Time is a precious, valuable, and finite resource. We all have only twenty-four hours in a day and only seven days in a week to get everything done. And for entrepreneurs, that can often seem like barely enough.
So, why does it seem like some of us can get more done in a day than others? The answer could lie in a few possibilities:
- Are you doing what’s important or simply what seems to be the most urgent at the moment?
- Are you wasting time on tasks that should be delegated, automated, or ignored completely?
- Have you ever considered tracking what you spend your time on?
I was curious about how I really used my time, so I tracked my time and activities for one week. I uncovered valuable information regarding inefficiencies in my world and have been able to take steps to eliminate, automate, and delegate better. I encourage you to do the same, and this article should help you get a good start on reclaiming your time and working more productively.
Day 1: Establish the Habit of Time Tracking
- Begin your day by setting up a simple time-tracking system. Whether you prefer digital tools or the classic pen and paper, make a note of every task and its duration.
- Be honest about where you’re spending your time. This is a judgment-free zone, and having more accurate information here will only benefit you in the long run.
- Reflect on what’s driving your activities:
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- Are you stuck in an endless loop of emails?
- Are you using your inbox as a to-do list?
- Are you wasting time on technology issues?
- Are you answering the same questions over and over from team members or customers?
Day 2-6: Document Your Activity, Reflect on Your Data, and Adjust Your Habits Accordingly
- Log your activities throughout each day, including breaks and interruptions.
- At the end of each day, reflect on the activities you tracked. What surprises you? What patterns emerge?
- Identify tasks that took longer than expected or seemed unproductive.
Day 7: Analyze Your Data and Strategize Improvements
- Compile your week’s data. Look for trends, time wasters, and areas (or times of day) where you were most productive.
- Categorize these activities into groups:
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- Critical tasks – those that only you can do
- Enjoyable tasks – Those that you really like to do
- Delegate-able tasks – Things that you could outsource or delegate to your team
- Automatable tasks – recurring activities that could be completed more efficiently with technology
- Useless tasks – activities with minimal impact that could be eliminated; you’re only doing them because you’ve always done them, and practice makes permanent
Next steps: Delegate and Automate
- Pinpoint tasks that could be delegated to your capable team members, or outsourced to a vendor. Empower your team members, entrust them with responsibilities, and create standard operating procedures on how these tasks should be done to your specifications. Even if it feels like training your team will only make the process take longer, in the long-term, delegating tasks to your team will free up your time for strategic decision-making activities.
- Research opportunities to automate repetitive tasks and leverage technology to save time and reduce errors.
- Be open to the possibility that certain tasks may not be adding significant value and consider eliminating or outsourcing them to focus on what activities will have the greatest impact on your business.
Starting 2024 off on the right foot
This exercise may seem simple but its impact can be profound. Its purpose goes beyond increasing efficiency – it’s about creating a business that thrives on your unique strengths.
By gaining insight into how you allocate your time, you’ll be able to identify areas for improvement, empower your team to take on more responsibility, and free up valuable time for more rewarding and impactful activities.
Time is your most valuable asset, and by mastering the art of effective time management, you can unlock doors to unparalleled productivity and success. I look forward to hearing about your time-tracking experience and findings in our next coaching session.
Regards,
Rhonda Rosand, CPA
CEO, New Business Directions
Running a business can feel like a whirlwind of responsibilities! Time is a precious resource for entrepreneurs, and taking shortcuts can be tempting. However, there’s one shortcut we really recommend against: sharing sensitive documents like bank statements, financial reports, tax forms, and more over email.
When safeguarding your valuable information (and that of your customers!), prioritizing security is essential. With cyber threats constantly evolving, email is an increasingly vulnerable method for transmitting confidential data. How should you be sharing your sensitive documents instead? By embracing secure document-sharing portals.
Document-sharing portals like SmartVault employ state-of-the-art encryption techniques to prevent bad actors from accessing your information. They can streamline your workflows, save time, and reduce errors. Most have user-friendly, intuitive interfaces, too, making it easy for you and your team to implement the new tech successfully.
Portals don’t just benefit you and your business, however! They can benefit your customer relationships, too. Adopting a portal can demonstrate a commitment to protecting your customers’ data, safeguard your reputation, and help you comply with data protection regulations.
While attaching a file to an email may feel more convenient in the moment, the tradeoff could be catastrophic. Instead, by taking an extra step to secure your documents, you’re investing in the long-term success of your business. We, as accountants, cannot overstate the importance of robust data security, and we encourage you to embrace the convenience and peace of mind that secure document-sharing portals provide!
The New Business Directions Team is bringing the #1 employee-rated and requested Time Tracking Software to you. Sondra Love, Wayne Kukuruza, and Rhonda Rosand, CPA have recently joined the 6000+ TSheets PRO community by participating in an exclusive TSheets PRO certification course accredited by CPAacademy.org.So what exactly is TSheets? TSheets is a time tracking and scheduling software designed for businesses that track, manage, and report time. TSheets provides the alternative to paper timesheets and/or punch cards to simplify human resource and data processing roles for companies of all sizes.
But here’s the best part, TSheets fully integrates with QuickBooks by syncing accurate timesheets to your QuickBooks file and eliminating manual, duplicate time entries. Tracked and approved time can now be easily exported to either QuickBooks® Online or Desktop with just one click. Management can then use their favorite tools within QuickBooks to process payroll, calculate job costing, and create invoices in a more simplified work flow.
TSheets is also a scheduling software making it faster and easier to build and share schedules with employees, assign jobs, and alert shifts while increasing profitability and improving communication. In other words, we want to keep your workforce running like a well-oiled machine.
Oh, and have I mentioned their amazing customer service department? The TSheets team who’s behind the product is just as amazing as the software itself. Customer service team is passionate about their customers and provides exceptional support in times of need. They make your entire TSheets experience FUN and might even give you a smile or two.
As a business owner, you’re likely torn in a hundred different directions every day. It can take up most of the work day just fighting fires, serving your customers, and answering employee questions – never mind the time spent on email. It’s super-easy to lose sight of what you can be doing to move your business forward the most.
That’s when “the one question” can come in handy. It’s something you can ask yourself at the very beginning of each day, even before you check your email. Make your question about you and your goals for your company.
The one question is, “What’s the highest payback thing I can do today?”
If your goal is to boost profits, then ask “What’s the highest payback thing I can do today that will boost my profits?” If your goal is to empower your employees, then ask “What’s the highest payback thing I can do today that will empower my employees?” If your goal is to make a difference in your community, then ask “What’s the highest payback thing I can do today to make a difference in my community?” If your goal is something else, tailor your one question to that specific goal.
It’s not about fighting fires or answering routine employee questions or even serving current 
customers. Although those tasks are all important and essential, none of them will take your business to the next level.
It could be meeting with a power partner or referral source that sends you a lot of business, designing the next campaign that will bring in a higher level customer, meeting with your employees for lunch, or researching new products to sell. It’s going to be a task that gets you working “on” your business instead of “in” your business.
If you like this idea, consider writing the question on a sticky note and posting it to your bulletin board so that you can see it 
every day. I write my question and my intentions each morning on a colorful piece of paper that I carry with me all day. I do this while having my coffee and long before I check an email, text or telephone message.
Try asking yourself this one question each day: “What’s the highest payback thing I can do today?” Then do it, and watch your business grow.
As we move into the fall season and the final quarter of the year, it’s a perfect time to commit to a project in your business that will help you reach the year’s end in better shape. Here are five ideas:
1. Back-to-School Time
If payroll expenses are one of the higher costs in your business, then it makes sense to boost your team’s productivity and maybe also your own. Fall is back-to-school time anyway, so it’s a natural time of the year to take on a course, read a business book, or hire an organizer to help you get more from your workspace.
If you spend a lot of time doing email, consider taking a course on Microsoft Outlook® or even Windows; learning a few new keystrokes could save you tons of time. If you need more time, look for a book or course on time management. Look for classes at your local community college or adult education center.
2. A Garage Sale for Your Business
Do you have inventory in your business? If so, take a look at which items are slower-moving and clear them out in a big sale. We can help you figure out what’s moving slowly, and you might even save on taxes too.
3. Celebrate Your Results
Take a checkpoint to see how your revenue and income are running compared to last year at this time. Is it time for a celebration, or is it time to hunker down and bring in some more sales before winter? With one more quarter to go, you have time to make any strategy corrections you need to at this time. Let us know if we can pull a report that shows your year-on-year financial comparison.
4. Get Ready for Year’s End
Avoid the time pressure of year’s end by getting ready early. Review your balance sheet to make sure your account balances are correct for all transactions entered to date. You will be ahead of the game by getting the bulk of the year reviewed and out of the way early.
Also make sure you have the required documentation you need from vendors and customers. One example is contract labor that you will need to issue a 1099 for; make sure you have a W-9 on file for them. If we can help you get ready for year-end, let us know.
5. Margin Mastery
If your business has multiple products and services, there may be some that are far more profitable than others. Breaking these numbers out to calculate your profit margins or
contribution margins by product or service line can help you see the areas that are adding the most income to your bottom line. Correspondingly, you can determine if you have any items that are losing money; knowing will help you take the right action in your business. Refresh your financials this fall with your favorite idea of these five, or come up with your own fall project to rejuvenate your business.
Just about every business relies on “word-of-mouth” marketing to get the vast majority of its clients. If this is true for your business, then it just makes sense to figure out how to boost your referrals from all sources. Referrals are almost always easier to sell and they keep your marketing costs low. But how can you do that?
The first step is to make sure that you know who your best current referral sources are. If you’re not already asking the question to new clients “How did you find out about us?” then I’d recommend you implement that right away.
If you do know the answer to that question for each customer, then you can make a list of your referral sources. Take a look at the list, and see what these referral sources have in common. Here are some questions to ask:
* Are they all customers?
* Do they all have a profession in common? For example, are they all lawyers, massage therapists, plumbers, or pediatricians?
* Have you properly thanked each of these individuals? If not, you can send out a thank you card or take them to lunch with no other agenda.
The last question to ask yourself is “where can you find more of the same type of people that are referring you?” If you discovered that you get a lot of business from dog groomers, then you may want to consider visiting every grooming salon in your zip code. You may also want to present a speech to a dog groomers Meetup group that you find.
You really can be proactive about your referrals so that business comes to you more easily. Try these tips to boost your referral sources in your business.
