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Business Owners: How to Save Money in the Last Month of the Year

Now that we are through the Thanksgiving season, many people have turned their attention to Christmas and New Year’s. Can you believe that we are only a month away from the end of the year? Time is flying!

Just because 2019 is approaching fast, doesn’t mean that you should put your business efforts on cruise control for the rest of the year. It is good to take time off to spend those hours with friends and family. The Christmas season is a great time of year when you can build memories that will last a lifetime. But the best thing that you can do as a business owner is finding a good balance between your work efforts and the time that is dedicated to your family.

One business focus that you might choose for December is to save a little more money before the end of the year. Padding your business bank account is the perfect way to ensure that 2019 starts on the right foot. You might be thinking about personal resolutions for the New Year… it’s also a good time to consider business resolutions that should be implemented in 2019.

Why You Need to Save Money for Your Business

Cash flow is one of the biggest challenges faced by small business owners. Even though things might be going great right now, you never know when sales are going to slow down. You might find that things slow down in January and February, which means that you could be scraping the bottom of your bank account if you aren’t careful.

Here are a few benefits that you will find by having a business savings account:

  • Cover Payroll in the Slow Months: Having enough cash to pay the costs of payroll is essential so that you can maintain a happy, satisfied workforce. Even though you aren’t having any problems paying these expenses right now, you might need a little extra in the future when things slow down.
  • Hit the Year End Sales: The holiday season is a great time of year to buy electronics and other equipment that is needed for your business. Having a little extra cash in the bank means that you can purchase these items when you find the right deal. Watch the sale prices and move quickly if you find an excellent price on the equipment that needs to be replaced in the office.
  • Schedule a Holiday Party: Do you want to boost employee morale? Consider scheduling a fun activity that can be shared with your employees during the holiday season. If you have the funds available, it can be a great way to strengthen relationships and show your appreciation for everyone on the team.
  • Cash Available for Inventory: If you are blowing through inventory during the busiest months of the year, then you need to be sure that you have enough money available to restock the shelves when the timing is right. Your savings account can cover the gaps if you need cash flow to pay for the new inventory shipment. In most businesses, these inventory costs need to be paid upfront, which means that you can’t wait to sell the products before you pay the vendors.
  • Emergency Funds for the Unexpected: You never know when an emergency will happen that requires unanticipated costs. For example, if the HVAC system goes out at your office, then you might be facing a repair bill that is thousands of dollars. Other common business emergencies could include a change in supplier pricing, employee strike, and more.
  • Be Ready for Tax Season: The beginning of a New Year means that you are also facing new tax bills. Make sure that you have enough money in the bank so that you don’t need to go into debt to pay the taxes. Work with your accounting team so that you can estimate the amount that will need to be paid in business taxes.
  • Pay Off Business Debts: Have you incurred business debt over the years? There are times when debt can be useful to keep the company running. But, carrying a heavy debt load means that you are also carrying the burden of interest and fees. Saving money and improving your financial practices can free up the funds that are needed to pay off these lines of credit.

There are unlimited options when you have a healthy savings account for your company. Make sure that you are implementing a good financial strategy with your small business accountant so that you have the extra money available when it is needed.

How to Save Money This Month

Saving money doesn’t have to be complicated or stressful. Instead, try some of these strategies to set aside a business savings account for a rainy day in the future:

  • Streamline Financial Practices: It’s no longer optional to put financial tracking and accounting practices on the backburner. You need to have the right systems in place that will help with the services that are required to keep up with your business numbers. As you implement the right accounting software and work with an experienced team of small business accountants, you can identify trends that are eating away at your cash flow. Create a system of transparency so that you can find the areas where you are losing money.
  • Track All Expenses: Some business owners find it hard to identify where the money is going. You might not be spending cash on big purchases, but the small transactions definitely add up over time. You should have a system in place that tracks every penny that is received and spent. Proper expense management by an experienced accounting team means that you won’t overlook deductions on your tax return. These details can result in big savings when you are consistent with expense tracking this month… and throughout the year.
  • Cut Unnecessary Fees and Expenses: Find and eliminate the line-items that are eating away at your profit margins. Often, service contracts are negotiated on an annual basis, which means that some of these contracts might be expiring at the end of the year. As you are renewing contractors for services such as janitorial work, contractors, ongoing services, subscriptions, and more, look for areas where you can reduce overhead expenses. For example, you might be able to find a cheaper service that will result in savings over time.
  • Sell Unused Equipment: If you choose to replace some of the equipment in your office during the holiday sales, then make sure that you have a strategy in place to get rid of the unused equipment. Old computers and cell phones can be wiped and then sold on the used market. Even though you won’t recover the full amount that was invested in the new product, used equipment sales can cover some of the costs that go into the purchases that are needed for the office.
  • Consider Trade Options: Is there a service that is needed for your company, but you don’t have the extra cash to spend? Consider a trade or barter where the value is exchanged without money changing hands. For example, if you are a small marketing firm and you need a new website designed, then you might be able to find a designer who will accept marketing services in exchange for the design services that you need. This strategy will help you conserve your cash so you can build your emergency savings account.
  • Hire Contractors or Temp Employees: If you need to increase your workforce during the holiday season, consider hiring temp employees or contractors for the services that are required. You won’t need to carry the burden of benefits and other expenses that come with hiring new employees. Plus, you can limit your spending during the holiday season without the obligation to continue the paychecks into the New Year when the services are no longer required.
  • Talk to Your Accountant: You don’t need to be a financial expert to improve your cash position. Instead, you need to be sure that you are hiring the right team of accounting professionals who can help you identify ways to save money. Tapping into a team of accountants can be a valuable way to help you learn from the mistakes that have been made by other businesses in the industry. Your small business accountant will provide the support and advice required so that you can save money and prepare for the future growth of your company.

Why is December the time of year that you need to take action on these action steps? Many business owners rationalize that they will enjoy the holiday season and then buckle down and work hard in January. Instead of procrastinating the things that need to be addressed in your company, it is time to take action right now! Implement your new system in December to be sure that everything is in place by January 1st. You will feel good knowing that your business is off to a good start for the new year.

Do you need help with your small business accounting? Easier Accounting is here to offer the assistance that is needed. We can help you implement the right accounting program in December so that you can save money this month and into the New Year. Call us to learn more about the services that are available: (888) 620-0770