Every year it seems like time keeps moving faster and faster. Maybe it’s because the weather has been so good but it feels like we are just finishing summer and there are signs of Christmas shopping starting to pop up. I don’t know about you but I’m not ready for winter. But with that said, we are now in the fourth quarter and though it may feel a bit early, I wanted to give you some reminders to help you as we wind down 2013 and get ready for 2014.

Here are six steps you should take now to prepare financial statements for year end and 2014 and to protect your interests.

1.  Evaluate the first nine months of 2013. Prepare your financial statements and analyze how you’ve done against the plans you put in place. Your analysis should include the level of sales and related profit margin and the nature and amount of overhead expenses.

2.  Prepare projected financial statements for 2013 taking into consideration your best estimates of the fourth quarter’s revenues and expenses.

3.  Use those projections to ensure that the company will be in compliance with any debt covenant requirements as of year-end. Knowing whether the company will be in compliance in advance of the end of the year gives financial statements time to change its activities or make adjustments that will ensure compliance and avoid adverse consequences with lenders.

4.  Update cash flow forecasts to ensure that adequate levels of cash will be available at year end to fund obligations, including compensation plans (such as bonuses and company retirement plans), tax obligations, and so forth, as well as to ensure that the company’s balance sheet has the right level of cash on its books for its year-end financial statements.

5.  Using the projected income statements, management should meet with its tax preparers and conduct tax planning discussions to ensure that all opportunities to minimize tax liabilities are taken advantage of within the tax rules. The best time to do this is well in advance of year end so management has time to take action before it’s too late. Too many times we have seen companies wait until the first quarter to begin looking at their tax picture and at that point it’s too late to take action that could have avoided tax liabilities.

6.  Prepare a business plan for 2014. The plan should include an update to marketing strategies and key goals and objectives for the company and employees. The financial plan should include a projected income statement for the company as a whole as well as key business divisions, and provide a detail of overhead and general and administrative expenses. The plan is then available to measure performance and to hold staff accountable. Measuring results against plans enables management to make adjustments to strategies on a timely basis as things change.

CFO Strategies works with its clients to accomplish all of the above steps not only at year-end but throughout the year. We continuously look forward to make sure that you achieve the success you want. Please give us a call to see how we can help you achieve your goals.

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