Prepare for 2021 With an End-of-Year Analysis of Your Business

A few short weeks from now, 2020 will be over, and let’s be honest—there are not very many people who will be sad to put this year behind them. With all that we have gone through in the last 12 months, this year, in many ways, will be replayed forever in the minds of those who experienced it. The year will also be locked in as an entry in your company’s financial records. For many businesses, the months of November, December, and January represent a relatively slow period for a variety of reasons, including industry cycles, consumer spending habits, and other social and economic factors.

Just because business has slowed, however, does not mean that your company should go into hibernation mode. In fact, just the opposite is true. As an experienced business law attorney who provides general counsel services for many businesses, I recognize the importance of utilizing slower periods of the year to conduct reviews not only of employee performance but also of the company as a whole. End-of-year reviews can be extremely beneficial to your company, as they can help illuminate areas of need and provide an opportunity to plan for the future.

Economic Analysis

The end of a calendar year is a good time to look back at the last 12 months and analyze what your company did well and what could be done better. You may consider bringing in a trusted consultant or economic expert to review your financial statements looking for best practices and ways that you could improve. He or she can also help you identify areas where you could be saving money by reducing redundant expenses or unnecessary costs.

Customer Lists and Accounts Receivable

Your end-of-the-year review should also include a careful inspection of your client list, especially if your company maintains revolving credit accounts or similar arrangements. If certain clients are several months behind on payments, consider renegotiating terms or finding creative ways to initiate action on their accounts. Do everything you can to maintain a healthy, positive relationship with the customer but be reasonable and firm regarding your expectations.

Inventory Concerns

Most businesses will take a product inventory at least once per year and now may a good time to do so in yours. Compare your inventory to your sales records to determine if you need to implement better inventory control processes. If products are missing without a good explanation, you have problems that must be addressed quickly.

It is also important to take stock of your physical resources, including production equipment, staff computers, and office supplies. In doing so, you may identify a need to develop improvement strategies for the upcoming year. Computer upgrades and new equipment are investments in your company’s future and must be planned carefully to ensure that they are implemented properly.

Let Us Help

If you have questions about end-of-the-year reviews for your business, contact an experienced Naperville business law attorney. Call 630-756-1160 to schedule an appointment at the Gierach Law Firm. We can help you find the best way forward for your company, allowing you to fully protect your interests.

Sources:

The Balance – Small Business

Money Crashers