Prepare Your Books For The New Year With Accounting Software

Watch the ball drop in New York City on New Year’s Eve, but don’t drop the ball with your small business in the new year! After holiday celebrations wind down and before tax season begins, take the time to reflect on your last year of business and make vital preparations for the year ahead. Learn how to make the most out of your accounting software by using it as a tool to plan for 2018.

Reflect On Last Year

Before you can move on to planning a successful 2018, it’s important to reflect on what happened with your business in 2018. Luckily, your accounting software makes this easier than you think. Now’s the time to grab a journal, a cup of coffee, and a few key accounting reports.

The following common accounting software reports can provide great insight into your business:

• Profit & Loss (or Income Statement): The Profit and Loss report (or Income Statement) shows your total net profit (or loss) for the year. Use this report to see how your company performed overall.
• Balance Sheet: The Balance Sheet shows your company’s assets, liabilities, and equity. It’s good to know these totals in general, but you can use this report to apply for funding as well.
• General Ledger: The General Ledger report shows all transactions from all accounts during the year. This report is helpful for a more detailed analysis.
• Statement Of Cashflows: The Statement Of Cashflows report shows all transactions affecting cash accounts. Use this to learn how much cash your company has gained.
• Statement Of Owner’s Equity: The Statement Of Owner’s equity shows owner’s equity at the end of the year
• Budget Overview: The Budget Overview report compares your yearly budget with the actual money you spent. Use this both to see how you performed and to plan your 2018 budget.
• Sales By Customer: The Sales By Customer report is self-explanatory and can be helpful for gauging your biggest clientele.
• Sales By Item: The Sales By Item report is helpful for learning which items did well and which didn’t sell as successfully.
• Sales By Employee: The Sales by Employee (or Sales Rep) report shows which employees have been most successful so you can use their methods to create a successful sales strategy.

In analyzing these reports, ask yourself:

• What worked this year and what didn’t?
• Where did my business succeed?
• Where could it still improve?
• Did we meet our goals? Why or why not?

I recommend filling a journal with notes. Not only will you be able to see your successes and the areas that need improvement clearly on paper, you can also refer back to these notes in the future to follow your business’s journey through the years.

Consider encouraging your managers and employees to do the same — or even make a day of it in the office!

Create New Goals For 2019

Now that you’ve taken some time to consider what happened in 2018, start creating goals for 2019. Start with the big picture. Ask yourself:

• Where do I see my business by the end of next year?
• Do I want to increase sales? By how much?
• Do I want to increase employee focus? In what ways?
• Do I want to expand my business? If so, how?

Think of general goals for the business as a whole and personal goals for yourself as a business owner. Ask your managers or employees to weigh in on their goals and ideas for the company as well.

Now that you have a few big goals jotted down, start thinking of smaller, practical steps that can lead you toward those bigger dreams. Big projects — like improving sales — can be daunting (which I’m sure I don’t have to remind you). But when you break a goal into many smaller, achievable checkpoints, the big projects can be completed with relative ease.

Take the time to parcel your goals for 2019 into manageable, practical baby steps, and you’ll stand an excellent chance of having a banner year. You can record these in your business journal to look back on later, or you can create tasks for these goals in several accounting programs.

If you need some extra inspiration, create a 2019 goals list on your office bulletin board, or keep a copy on your desk to stay motivated. Send a company goal list to each of your employees so that the whole business is on the same page, working toward the same goals.

Make A Budget For The Year

While budgeting can be incredibly daunting, accounting software makes the process easy. Most accounting software programs even have a built-in budgeting feature.

For example, with QuickBooks or Xero, you can create yearly budgets from scratch or generate them automatically based on last year’s data. If you created a 2018 budget using your accounting software, make sure to also take advantage of that software’s budgeting reports, which can help you analyze last year’s income and expenses and better plan for 2019.

Brainstorm A New Sales Strategy

Now is the time to update or create a brand new sales strategy for the next 12 months. Consider what’s working about your current sales plan and what could stand improvement. Which processes and marketing strategies were successful last year? Are there any sales tactics or marketing strategies that you haven’t tried yet?

I recommend taking a look at the sales reports your accounting software provides. Reports like Sales by Item and Sales by Customer can help you see what products are successful and give you a better idea of how to reach your target audience. It can also be very useful to look at Sales by Sales Rep reports with your sales team and have each member share which sales methods have been successful for them. Don’t be afraid to ask for input. Your employees may have terrific new ideas to implement or ways to improve current processes.

It’s nice to create a formal, written sales plan that you can then distribute to your sales team and refer back to this time next year.

Consider Integrations

Integrations may be the answer to achieving your 2018 business goals. Integrations are software add-ons that connect directly with your accounting software to bring you more features. Integrations vary, and may involve anything from CRM to email marketing to scheduling to project management to time tracking to analytics and more.

When should you use an integration?

• If you need features that your accounting software doesn’t have.
• If you spend too much time on tasks and need to automate processes.
• If you want to offer more payment gateways for customers to pay you faster.

Go back to your list of 2018 goals and your analysis of 2017. Consider whether an integration could be the answer to fixing an area that needs improvement or achieving a brand new goal.

Update Contact Information

If you read our Small Business: How To Close Your Books At The End Of The Year post, then you’ve already updated your employees’ information. Now is a great time to take a break and make sure the rest of your contact information is accurate. Ensure that the contact information for your customers and vendors is completely up-to-date. Mark customers or vendors as inactive if needed, to clean up your software.

This is a great time to check up on customers as well. Send consistent customers a thank you card or reach out to old customers to see if they are interested in your products or services once more. Not only will you feel better having everything organized, you could potentially start the year off with some new sales and happy customers.

Get Organized

The start of a new year is a great time to get organized.

We’re talking about more than cleaning your desk, folks. Evaluate your current filing system to see how efficient and up-to-date it is. Maybe create a better way to store online accounting records and reports. Upload your receipts directly to your accounting software to store them in the cloud and save some paper. Whatever this looks like for your company, you won’t regret starting the year off with a clean, organized slate.

Give Your Invoices A Face-lift

If you want your company to get off to a fresh start this year, consider updating your invoice template. It seems like a small thing, but having an appealing, modern invoice is a huge plus for businesses. Say goodbye to boring black and white, Times New Roman templates or Excel monstrosities, and ring in the new year with a new look. Don’t be afraid to use color, be bold, and show off your company logo. I’ve said it before and I’ll say it again: Invoice templates are more than a means of getting paid — they’re a reflection of your company’s professionalism and brand. Start off 2019 with a template that you’re excited about.

Final Thoughts

Taking a little time to reflect on 2018 and plan for 2019 can make all the difference if you want to run a successful business this year. We hope that these suggestions inspire you to think deeply about your business’s goals and act practically to achieve them.

From our company to yours, we wish you a very happy New Year!