This article was originally published on the Access+ portal for ByrdAdatto Access+ members. Enjoy this free access to learn more about the importance of preparing for financial success.
ByrdAdatto is grateful to have this article contribution from guest author Jessica Nunn of Maven Financial Partners. This article does not express the opinions of ByrdAdatto and should not be construed as legal advice. If you have any questions regarding the article, please contact Jessica directly.
If your practice’s financial success is on your list of goals this year, we have a few simple measures you can take to help ring in your best decade ever.
Create a Budget
While we think any time’s a good time to create a budget for your practice, the beginning of the year is probably the best time. There’s almost a year’s worth of data for you to review and assess, and you have the whole new year ahead of you. Go into the year with a financial plan for your business, complete with provider goals, revenue expectations, and expense planning. Using your budget in the following year will help you make decisions, predict cash flow, and understand if you’re performing how you expect to perform. Remember, failing to plan is planning to fail.
Organize your financial records
Managing your financial records is critical throughout the year, but those records need even more attention at year-end. If you haven’t been keeping good records during the year, organize what you do have and engage the services of a bookkeeper to begin working on your books. Don’t wait until tax time.
We recommend using software like Quickbooks or Quickbooks Online to track your income and expenses during the year. If you’re using Quickbooks, but don’t really maintain it during the year, consider hiring a bookkeeper to keep your financials up to date on an ongoing basis. Knowing your financials are current and accurate will allow you to make financial decisions faster and easier.
Obtain a tax projection for 2019
If your books and records are up to date, work with your CPA to review your financials and estimate your tax liability. Year-end tax planning provides the perfect opportunity to make sure you’ve paid in enough taxes during the year. And, if you haven’t, it gives you a little more time to plan before April 15th. By reviewing your tax situation before your taxes are being prepared, there’s time to make decisions in your practice that could reduce your overall tax liability and the chance of being surprised by a tax bill on April 15th.
Staying current with your financials reduces tax surprises. If you’re not current, consider getting organized, and then staying organized, as we’ve already discussed.
Purchase any needed equipment before year end
If you’re considering purchasing a laser, a new chair, or any other equipment for your office, consider installing and using the equipment prior to year-end. Tax laws, including section 179 and bonus depreciation rules, allow equipment to be fully deducted in most cases. We’re not saying you should buy equipment you can’t afford or don’t need (you’ll know whether you can afford it if you’ve worked through your budget), but purchasing substantial equipment before year-end can be an effective way to slash your tax liability.
The beginning of the year is a busy time, and we know you have a lot on your to-do list. However, carving out some time in the beginning weeks of the year to focus on the financial health and goals of your practice will prove to be one of the best ways to set yourself up for another year of financial success.
For more information on preparing for financial success, schedule a consult with us at info@byrdadatto.com.