You have decided to start your year-end planning early. You have gathered the facts to calculate your current net profit. You have your projections for income and expenses for the rest of the fiscal year. You have even set a realistic goal for your profit. What do you do now?
Now comes the fun part! You are set up to take action to affect your final year-end net profit. You will need to monitor your progress and continue to make adjustments right up to the end of your fiscal year-end.
Keep monitoring your progress
Year-end planning is not a one-time exercise.
Even though there are many transactions that you do have control over, there are others that you just cannot control. This means that you will need to monitor your plan up until the very end of the year to ensure success.
You can build a spreadsheet to help you monitor your progress. Your current year-to-date Income Statement or Profit & Loss Statement will show you what your year-to-date net profit is as of today. You will also need to update your estimated additional revenue and expenses for the remainder of the year on the spreadsheet.
You may need to adjust your year-end goal or adjust your plan as you get closer to the year-end. You may even need to adjust your goal or plan multiple times. But that is okay. Monitoring will help you to determine if you need to adjust your plan.
Keep adjusting your plan until the end of the year
Timing is everything when it comes to year-end planning.
It can be especially critical in the last week or the last days of the fiscal year to see where you are at and make adjustments as needed. Adjusting your plan is the key to success.
Sometimes big surprises happen.
A couple of years ago one of our construction clients unexpectedly received a wire transfer from a customer for more than $1 million dollars two days before the end of their financial year. We had to rework their year-end plan quickly! By monitoring their progress we were able to make adjustments to their plan right away. As a result, they were able to pay some expenses earlier than they originally planned and all was good.
Imagine what would have happened if our client did not rework their plan. It would have resulted in them having a huge unanticipated profit for the year. This could have created a huge tax liability! The monitoring of their progress and being able to quickly adjust their plan made all the difference.
You can take control of your profit
You can take control of your business story. Imagine how good you will feel when you take control of your profit rather than letting it control you!
You can be in control of your profit and direct the remainder of your business story for this year.
We help many of our clients with the planning and monitoring of their year-end profit. Read more about the services we offer that can help you.