Not Everything is About Taxes

By Bill Jones, Fractional CFO and CPAIf you are like a lot of businesses you just spent a considerable amount of time inputting data, reconciling accounts and taking other steps necessary to file a tax return or at least make an estimated payment and extended the return.  You may be relieved that is over or surprised at the results, but now that it is over what should you do now?

This is a great opportunity to evaluate the past year and focus on the year ahead.  The financial statements you prepared told a story about what happened in the past.  Ratio analysis and a little research will at a minimum tell you how you compare to your competition.  Further interpretation of specific ratios and trends can answer questions about the future including ideal inventory levels, when you can expect to cash collections, whether you can meet future obligations timely and when to hire the next employee, just to name a few. 

It is a perfect time to identify metrics that you wish you knew and establish systems to track the relevant information going forward to continue to provide better insight in managing your business.
Also consider the current legal and tax structure of your business:

• Is it still appropriate for your current situation? 
• Does a change in ownership, service line or business environment warrant amending your bylaws or operating agreement?
• Is the retirement plan you have in place to right plan to not only attract good talent, but provide the most flexibility for the owners to maximize contributions?  Are you positioned to take advantage of the recent changes to the tax code?

Other things to consider: 

• Is your business still in line with your vision? 
• Is the company holding true to core values?
• Identify you most significant achievements, what made them possible?
• What were some things that went wrong, what was the cause and how did you overcome those obstacles?
• Do you need to make a change in direction, improve a process or adjust expectations?
• Are you prepared for growth, succession, or do you have a plan if there is an economic downturn?

 
Whether it is the questions above or others based on your own priorities and values, my message is that it is important to continuously look at your business, both historically and prospectively, with objectivity and make changes as necessary.  Business big and small are impacted everyday by the constantly changing business environment.  Those that proactively adapt and change will thrive. 
 

William F. Jones, Jr. CPA, CGMA (Bill) and the team at Jones & Associates, P.C. have over 28 years of experience helping companies and their owners through a wide range of business and financial issues. Bill is also more than happy to discuss the best trails to run or cycling routes in Boulder and the Colorado front range.  He can be reached at bill@jonescpapc.com or directly at 720.506.5337.