Each year, the Fourth Quarter poses new challenges and opportunities to the average business professional. Whether engaging in the foot race of finishing the year with record sales or simply ensuring your accounting, tax reporting and legal compliance are in order, most business professionals suffer from task overload in trying to organize and accomplish company (and personal) objectives prior to December 31. Fortunately, you need not reinvent the wheel to ensure you're effectively checking-the-boxes on your 'to-do' list. Follow this simple guide and you should have most of the heavy lifting done.
Task 1: September Leadership Meeting: Sometime in September, your executive leadership team (which may consist only of you) should meet to organize your end-of-year action plan. Discussion items should generally include (a) Accounting Issues (ie., the need to update accounting records to be ready for review by the accountant or bookkeeper); (b) Legal Issues (pending or contemplated) and, (c) Project Issues (ie., what pending business projects can you realistically schedule for completion before the end of the year).
Task 2: Accounting Update (September): Assuming your company is not a "big" company, contact your bookkeeper or tax professional to ask them what specific items you should be doing to prepare for the end of the year. Typically, they will recommend updating accounting records/software, verifying employee addresses (for W2 purposes) and possibly setting a meeting to allow them to ensure records have been properly kept. If they do not frequently update your books, you should ask them to develop updated Financial Statements for your annual Financial Review (See Task 4) and verify that all appropriate tax filings have been made for the year.
Task 3: 2012 Legal Issues (October): Whether an employee was injured on the job, a vendor failed to fulfill a contract or you've identified a form contract or employee handbook with antiquated language, organize your "legal" to-do list and sit down with your lawyer to prioritize those items. While some issues may be pushed off until next year if absolutely necessary, you may risk losing claims against others if you fail to promptly act. Failure to update your legal records or contracts may unnecessarily expose your company to liability issues so resist the urge to procrastinate.
Task 4: Financial Review/Audit (October): One meeting which should never be avoided is the annual financial review of the company. After having your accounting professional draft your financial documents (typically the Balance Sheet, Income Statement and Cash Flow Statement), carefully review each to ensure that the company is financially healthy. Are you spending too much? Are your operating margins where they should be? What opportunities are present to improve your profitability? This meeting may include your leadership team as well as your accountant and attorney, if necessary.
Task 5: Deal with Key Employee Issues (October): Although often overlooked by companies, personal issues of key employees should be considered. No matter if it's an owner of a small business or executive at a larger company, such employees should be treated specially to ensure that their personal needs are properly dealt with and they may continue to focus on company business. Typically, issues of this nature include (a) helping the employee establish estate or financial plans (e.g., wills, children's trusts, powers of attorney); (b) assisting the employee with alternative work scheduling for the coming year; (c) ensuring that such employee's health coverage is adequately serving their needs. Companies may typically schedule annual reviews with key employees to discuss work performance and address such issues.
Task 6: Goal Review/Setting (November): If your company has the good habit of setting annual goals, you should review the prior year's goals to see whether the company met them. Evaluate the company's performance in light of such goals (including a realistic assessment of why such goals were/ were not met). Then, looking forward, set goals for next year. In plotting future goals, commit them to paper, be specific and don't be afraid to push the boundaries of your past success. Typically, the review and setting of such goals should be done in a workshop setting where the leadership team may be creative and free of distraction.
While no list of this nature could specify each and every action item this list can serve as a starting point for most small businesses and professionals looking to organize their end-of-year tasks. Questions on advanced planning techniques or specific issues may be directed to the author for comment.
Chris Parvin is a business and estate planning attorney at the Dallas, Texas law firm of Palmer & Manuel LLP. He may be contacted at cparvin@pamlaw.com
