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small business finance New Years resolutions for 2021

5 New Year’s Resolutions for Your Small Business Finances

People might view New Year’s resolutions through a different lens in 2021.

2021 is actually quite similar to most other years in that there’s a sense of hope, a chance to start things anew. But the idea of changing, making yourself better? That might be difficult for individuals and businesses alike to swallow — after all, they’ve spent the past nine months or so adapting to survive a pandemic, as well as the accompanying economic depression and social upheaval.

Nonetheless, there are a number of practices (many of which have nothing to do with COVID) that can help small businesses get an edge in 2021. The following are a few finance-minded New Year’s resolutions that small business owners should make as we turn to the next page in the calendar.

5 Small Business New Year’s Resolutions for 2021

Build Strong Financial Habits

One of the best ways to improve yourself in almost any facet of life is to build things into your routine. That certainly goes for finances. For instance, setting aside time every two weeks or even every month to look at your books will deliver a pair of benefits. For one, you’ll be better able to gauge how closely reality is matching your budget, which will allow you to make more tactical financial decisions as the year marches on. Also, keeping a regular eye on your finances can help you detect fraud, which can cripple small businesses.

Be Cash-Flow Intelligent

Ultimately, every business wants (and needs) to achieve profitability. But here’s a not-so-fun fact: You could be a profitable company and still be at risk of going under for not having enough money. That’s a problem with cash flow — how much actual cash flows in and out of your business. Think about this: If you score a bunch of contracts in January that don’t get paid out until June, none of that eventual windfall can help you pay your bills in February, March, April or May. So put learning cash flow management on your New Year’s resolutions.

Learn to Delegate

If you find yourself fortune enough to hire new employees, don’t forget: You need to actually use that fresh blood. Because small business owners have usually managed so many aspects of the business by the time they hire their first workers, they’re slow to let responsibilities go, whether that means micromanaging or redoing everything their workers do. But you can’t do everything in perpetuity, especially if you want your small business to grow. In 2021, you need to learn to trust your team. That’s how businesses expand — and how business owners avoid burnout.

Don’t Let Equipment Hold You Back

Small businesses are often squeamish about making big-ticket purchases, and that likely will be increasingly so in the new year following the financial hardships of 2020. But in some cases, substandard or malfunctioning equipment can actually weigh on the top and bottom lines to the point where it makes financial sense to take that hit. The good news? The U.S. tax code can soften that blow. Equipment, vehicles and even software are often tax-deductible, helping you to recoup some of that purchase price come tax time.

Hire an Accountant

Along the same lines, hiring an accountant might seem like a big-ticket purchase, but a.) it might not be as expensive as you’d think, and b.) you could end up recouping a lot of that cost thanks to the tax code. 2021 is just kicking off, which means you have a full year to implement a tax strategy. With that much time, you can set yourself up for literally thousands of dollars in tax deductions, writeoffs and other windfalls. So in the new year, resolve to let experts take your finances to the next level.

McManamon & Co. offers a wealth of tax and accounting services that goes far beyond tax preparation. That includes helping you map out a full-year tax strategy, creating financial statements, even training your own accounting staff as you scale up.

With a new year comes new possibilities and potential. Let us help you make the most of it. Call us at 440.892.8900 or contact us online.

| Posted in accounting, McManamon & Co., Small business finances