Dec 30, 2022
This Podcast Is Episode Number 504, And It's About Year-end Closing And Planning For Construction Business Owners
The end of the year is typically a
reflective time. Something about that lull between holiday
festivities and New Year's Eve sets the stage for introspection and
review. While you're busy reflecting on the year ending and making
plans for the new one about to begin, make sure you take some time
to consider your finances.
Preparing your End of Financial Year (EOFY) information often feels
stressful—there are receipts to sort out and reports to review. You
must ensure you have all the necessary information about your
income and expenses. It can be overwhelming, and it can make the
EOFY feel daunting.
The end of the financial year isn't just a time to collect receipts
and find invoices. It's also a time to reflect on how your past
year went, what went well and what didn't, and what you can change
for next year.
Here are three tips to make the most of your end-of-financial year:
1. Consider redoing your
files
One of the most overwhelming parts of the end of the financial year
is finding all the invoices, receipts, and reports you need to file
your taxes correctly. Pay attention to how easy it was—or wasn't—to
find what you needed this past year.
Did you have to search 15 different places for all your receipts?
Did you have a combination of online and physical invoices? Did you
have clearly labeled folders for everything? Did you leave
everything for the last minute?
If you found yourself searching high and low for every piece of
paper you needed, you might want to consider revising your
paperwork, so it's easier and less time-consuming to manage.
Can you keep track of everything through software and apps? Is
there technology or equipment that can help you? Is it worth
investing in a filing cabinet?
The effort you put now into sorting your paperwork will pay off
hugely every year when you can quickly and easily find all the
information you need. Let's face it; you'll come up against the end
of the financial year every year, so you may as well be systematic
about it.
2. Reflect on your
year
The end of the financial year is a perfect time to reflect on how
the past year went. Celebrate the big successes, but remember to
focus on other victories. Even if you didn't meet your financial
targets, did you survive a particularly tough year? Did you manage
to pivot your construction business and try a new model? Did you
take some risks and learn from them? Did you grow your business or
expand your offerings?
It's great to have goals for each year and celebrate when you
achieve them, but it's also important to look at where things
didn't go according to plan and how you grew from those situations.
You may need to refine your business plan if you're not meeting
your financial targets or rethink how you arrive at your goals in
the first place.
Do this before you start planning the year so you can revise your
strategies in the future.
3. Plan for the
future
Now that you've reflected on what went well and what went sideways,
you can better plan for next year. Research upcoming events and
schedule your marketing calendar. Plan to address slow times or
busy periods. If you didn't meet your financial targets last year,
either change how you set your goals or your strategies for
achieving them.
Many retailers offer significant discounts at the end of the
financial year. Does it make sense for you to make a purchase right
now? Should you buy new equipment, technology, or other goods now?
It may be worth it if you have the money to do so and need those
items.
Although the end of the financial
year can feel stressful, it's also a fantastic time to reflect on
the past year and celebrate your achievements.
You can take the time to plan and
incorporate the lessons you learned from the past year to make the
upcoming year your most successful.
If you made your goals, that's great! If they fell by the wayside,
look at what you could have done differently. Or, take some time to
set a more manageable goal to get that sense of accomplishment next
December.
Construction is a tricky business, and people's failure is common.
Most of our clients and people who reached out have failed or come
very close.
Very close doesn't mean failure because it doesn't matter how many
times you are knocked down; it only matters that you learn your
lessons, get up and go again.
This coming January, it's time to hit that reset button or, better
yet, start again no matter what day of the month, no matter where
you are in your construction company journey.
I chat with contractors like you every day. You tell me your
stories. About your challenges in running a business, keeping up
with the bookwork (accounting and bookkeeping). About estimating
and bidding jobs, doing the work and collections from clients,
having (or not having) employees, and paying their taxes.
Talk to your clients (or reach out to your previous ones) about
their needs, too. Ask them how their habits have changed, what
projects they're looking forward to this new year, and the
challenges they're facing or, most likely, will need to address in
the coming months - roof replacement, bathroom remodeling,
renovation budget concerns.
Construction is what makes civilization and a civilized society
possible. Because of the commitment of people like you to step out
of your comfort zone and start a construction company and work it,
we owe you all an outstanding debt of gratitude.
Thank you for working hard through these past few years when most
of us are hunkered down, choosing to continue your service, and
maintaining our homes, businesses, and community.
May this New Year bring you joy,
hope, prosperity, and love.
About The Author:
Sharie DeHart, QPA, is the co-founder of
Business Consulting And Accounting in Lynnwood, Washington. She is
the leading expert in managing outsourced construction bookkeeping
and accounting services companies and cash management accounting
for small construction companies across the USA. She encourages
Contractors and Construction Company Owners to stay current on
their tax obligations and offers insights on managing the remaining
cash flow to operate and grow their construction company sales and
profits so they can put more money in the bank. Call 1-800-361-1770
or sharie@fasteasyaccounting.com