Strategic Business Planning for the Last Quarter of Any Given Year

Business planning always evolves. What works one quarter may not work for the next. That’s why you need to keep abreast of your KPIs and metrics so you can make informed decisions as your business grows. As such, today’s blog from LongSchaefer talks about strategic business planning for the last quarter of any given year.

Related Post: How Sharp Business Planning Helps Your Firm Recover After the Coronavirus

Staffing Levels

Did your workload increase towards the end of the year? Does your business pick up or decline during the winter holidays? How many workers do you plan to retain going into next year? If growth continues, do you have enough resources to hire more people?

Labor is the single biggest expense for small and medium-sized businesses. Optimizing your labor costs can make a huge difference when it comes to business planning in the coming year. Knowing what staff you need to have on hand going into next year will help you to plan your budget. 

Budgets

Budgeting for various departments must be precise while leaving some wiggle room. If revenue dips, can you reallocate funds to other departments or reduce profits temporarily until the situation resolves? Do you see room for improvement in HR, marketing, or management? How about investing in tools to make your existing departments more efficient?

Revenue forecasts should be realistic based on the data you’ve collected over the past year. Also, the IRS may give you tax advantages if you make capital investments before the end of the year. 

Goals for Next Year

Never forget SMART goal setting. SMART is an acronym describing the characteristics of each goal to set on your way to success.

Specific: Write down your specific goals for the coming year.

Measurable: Achieving a specific goal is only as good as the analytics used to measure it. The more data you collect, and the more incremental goals you have, the more accurate your numbers are in terms of reaching a goal. 

Achievable: Lofty goals are nice to have. However, they must be achievable within a specified timeframe. 

Relevant: Is your goal relevant to your business? What department does the goal belong to?

Time-Bound: What’s the timeframe for the goal? The end of the first month? The second quarter? 

Think about how these goals affect your budget. Will you have to hire more people, invest more in marketing, or make capital improvements to achieve these goals?

Accurate Accounting

Accurate accounting is crucial when it comes to business planning for the next year. You need as much data collection as possible, and then the proper analytics software to interpret the data points. That way, you can make an informed decision about your coming year’s goals. Hiring an accountant might prove useful in this regard.

Related Post: 5 Ways Accountants Help With Business Planning

Business Services From LongSchaefer

The accounting pros at LongSchaefer can tailor a business services plan for your exact situation. Contact us or call (513) 245-0300 for more information on our business services.

Tax Planning: End-of-Year Tax Strategies to Plan for Now

It’s the last quarter of the year, and you’re prepping for the holiday season. The last three months of the year are a great time to employ some end-of-year tax planning strategies so you can optimize your return and lower your income tax liability. LongSchaefer explains in today’s blog.

Related Post: Tax Planning Tips for the Holiday Season

Know Which Deduction to Take

Before you make any firm tax planning decisions, you need to determine which deduction to take. The standard deduction is a set amount by which the IRS reduces your income liability. Amounts of the standard deduction vary, depending on if you’re filing as a single person, married and filing jointly, or submitting your taxes as the head of a household. 

It makes sense to itemize deductions if your total annual deduction will be greater than the standard tax deduction. Common itemized deductions include interest on mortgage payments, certain healthcare expenses, and charitable contributions. 

Contribute to Retirement Accounts

Contributions to retirement accounts are a tried-and-true tax deduction that individuals and businesses can make for tax planning purposes. That’s because the annual contribution limits for these plans are $19,500, as of 2020. Those limits may go up in the coming years.

Do you have any extra income in savings heading into the end of the year? Have you lagged in your contributions to IRAs and 401(k) plans? As you decide how best to invest your money at the end of the year, contributions to retirement plans can defer taxes until you use the money for your retirement. 

If you’re 40 and you want to retire at 70, you can put off paying income taxes on those contributions for 30 years. Suppose you put the maximum amount, $19,500, into your retirement account by the end of 2020. That reduces the income used to figure your tax liability by $19,500.

Leverage Stock Losses to Offset Capital Gains

The stock market took a beating in 2020 due to the COVID-19 pandemic. Although the stock market has climbed back up, you can deduct up to $1,500 ($3,000 if filing a joint return) of capital losses in excess of capital gains per year from your ordinary income. Although this isn’t as great as contributing to a retirement account, these smaller deductions add up when it comes to tax planning and reducing your income tax liability every year.

Related Post: Tax Planning: Charities and Tax Deductions

Tax Planning Services From LongSchaefer

The tax and accounting pros at LongSchaefer can tailor a tax planning strategy to your specific situation. We recognize that everyone’s definition of success is different. Contact us or call (513) 245-0300 for more information on our tax planning services and end-of-year tax strategies.

May 2020 COVID-19 Update

In order to comply with the Ohio Health Department Order & CDC social distancing recommendations, our offices are closed until further notice. Rest assured that our established protocols and available technology will allow us to provide the same level of service and quality you expect from LongSchaefer during this time.

The SBA has announced details of how it’s helping small businesses through the Coronavirus outbreak. The IRS is sending payments to families affected by this crisis. 

Please click on our Coronavirus information pages for more information.