By Steve Seals
As 2024 nears its end, it’s crucial for small business owners to take time to review their financial planning strategies and prepare for 2025. End-of-the-year financial actions, if done diligently, can significantly impact your business’s bottom line and future growth.
By completing these tasks, businesses can pinpoint areas for improvement, obtain important insights into their financial performance, and make well-informed decisions. Accurate financial records are also crucial for attracting investors, obtaining loans, and adhering to government regulations.
I’m sharing this comprehensive checklist to walk you through the essential steps needed to close out 2024 and prepare for a financially strong 2025.
1. Financial Recordkeeping
The first step to closing out the books on 2024 is verifying you have well-organized and up-to-date records. Accurate financial recordkeeping is essential for making informed decisions about the future of your business.
Complete these tasks:
- Collect Financial Documents: Compile all financial records, including bank statements, invoices, receipts, and tax documents.
- Bank Account Reconciliation: Check that every bank account has been balanced and reconciled.
- Review the General Ledger: Confirm all entries are correct.
- Update Inventory: To reconcile inventory levels, perform a physical inventory count.
2. Year-End Financial Statements
Once you feel confident about the accuracy of your recordkeeping, the next step is to prepare and analyze your year-end financial statements. By carefully analyzing these statements, you can evaluate your business’s performance, discover areas that need improvement, and make informed decisions about future strategies.
- Create Financial Statements: To evaluate the financial health of your business, create an income statement, balance sheet, and cash flow statement.
- Evaluate Financial Performance: Examine your financial records to find patterns, strengths, and weaknesses.
3. Retirement Planning
To safeguard your own and your workers’ financial stability, end-of-year retirement planning is a wise move. You can optimize your retirement savings by evaluating and modifying retirement plans, contributing to those plans, and utilizing tax-saving techniques.
Here are the tasks needed to get started:
- Review Retirement Contributions: Confirm you have contributed the optimal amount to your retirement plans.
- Analyze Investment Performance: Determine how well your retirement investments are performing and make any required corrections.
4. Tax Preparation
Now is a good time for end-of-year tax preparation. This step is essential to mitigate your tax liability and verify compliance with tax regulations. Consider working with a tax professional to optimize your tax situation by making use of tax deductions, credits, and other strategies.
Complete these tasks to prepare for tax season:
- Obtain Tax Documents: Compile any required tax records, such as W-2s, 1099s, and receipts for expenses that are deductible.
- Speak With a Tax Professional: Go over tax-planning techniques to verify you’re following tax laws.
- Make Estimated Tax Payments: Confirm you made all estimated tax payments on time.
5. Insurance Review
Lastly, for proper coverage and reduced risks, small business owners must examine their insurance policies at the end of the year. Businesses can safeguard their future, reduce liabilities, and shield their assets by evaluating insurance plans and making any necessary modifications.
- Examine Insurance Policies: Verify that your coverage is current and adequate.
- Consider Increased Coverage: Assess whether you need extra insurance, such as business interruption or cyber liability coverage.
Reach Out for Help
Completing the end-of-the-year financial actions outlined above helps you confidently close out the current year and set your business up for a financially stable 2025.
One of our specialties at Seals Financial Planning & Investments is assisting small business owners in building, safeguarding, and enjoying their wealth for years to come. We’d be happy to help if you need assistance tying up loose financial ends before the new year arrives.
Additionally, we collaborate closely with our network of certified public accountants so you receive seamless financial consulting services, including cash flow management and tax planning.
To get started, please give us a call at (859) 230-3476 if you would like to schedule a time to meet.
About Richard Stephen (Steve) Seals
Steve Seals is owner and independent Registered Investment Advisor Representative at Seals Financial Planning & Investments VI, LLC, a financial planning services firm based in Lexington, KY. As an independent Registered Investment Advisor Representative with about two decades of experience in the investment and insurance industries, Steve’s firm is founded on getting to know each client personally, allowing him to provide sound financial advice throughout their career and into retirement. With the mission of guiding clients on the path of success, Steve is fueled by his commitment to excellence and goes the extra mile to make sure clients are fully satisfied. He believes in maintaining a positive mindset, creating partnerships with a purpose, and always striving for significant outcomes.
Born in Jenkins, Kentucky, Steve grew up with a love for basketball and serving his community. After high school, he served nine years in the United States Marine Corps, then earned a bachelor’s degree in accounting. He was eventually able to put his degree and desire to help others to work as a fiduciary financial planner. Prior to founding his own firm in 2014, Steve learned from working with Edward Jones, US Bank, University of Kentucky Federal Credit Union, and CUSO Financial. He also received his Security Series 63 and 65/66 through Keystone Financial Group, LLC, and holds various life, health, and variable insurance licenses.
Steve and his wife, Angie, have three daughters (Lauren, Peyton, and Ashton) and two grandsons (Kenyon and Kai). Steve holds a private pilot’s license, and the family enjoys sports, spending time at the lake, and traveling. To learn more about Steve, connect with him on LinkedIn.
