EA - Start 2020 Right with These Small Business Accounting Goals

Start 2020 Right with These Small Business Accounting Goals

The New Year is just a few days away… are you ready for a fresh start? Not only is January 1st the beginning of a New Year, but 2020 means that we are also ushering in a new decade. This date on the calendar marks a symbolic opportunity to reset, begin new initiatives, and align your habits to create the lifestyle that you desire.

What do you want to create in 2020 and beyond? As a small business owner, you likely have both personal goals and business goals in mind. Keep in mind that building your personal mindset can be an effective way to help your business grow as well.

While there is much to be said about mindset and personal development goals, today we are going to focus on New Year’s resolutions that will help you create a strong financial foundation for your business. Following these strategies will boost your cash flow, improve your tracking systems, and give you more peace of mind regarding the financial health of your company.

Reasons Resolutions Fail

Everyone has the best of intentions at the start of the New Year. But, how long do you stick with the new habits or goals that you’ve chosen? More often than not, we start with great intentions, then slack off by the end of January or beginning of February.

If you want to set yourself up for success, then you need to be deliberate in setting goals that will last. Not only do these goals need to be achievable, but they also need to be meaningful and impactful. When you can see results from your goals, then it increases the likelihood that you will maintain consistency in the future.

Here are three main reasons why New Year’s goals often fail:

  • You choose a goal without a realistic plan to achieve the outcome
  • The resolution is not defined or too vague
  • The goal is based on what society or other people say that you should be achieving

Understanding the reason why many New Year’s resolutions fail will give you insight into the strategies that should be followed to help you choose the right goals for 2020.

Creating SMART Goals for Your Business

In 1981, the journal Management Review coined the term SMART goals to define an effective system for setting goals that will work. Keep these simple tips in mind as you are creating your business intentions for the New Year:

  • Specific: Choose goals that are clear and deliberate. This goal should be concrete, instead of a vague idea about what you want to improve. For example, setting a goal to “improve your small business bookkeeping system” is too vague to know if you actually achieve the goal. Instead, define guidelines about what needs to be achieved, such as: “I will hire a new bookkeeper by January 15th and have a new accounting software in use by February 15th.”
  • Measurable: Next, you need to be sure that there is a way to measure your progress and success with the goal. For example, if you want to improve your consistency with bookkeeping and accounting, then you need to be able to measure the actions that are being taken. You might set a goal to spend 5 hours per week on accounting tasks, with specific measurement points regarding when reports run and analyzed.
  • Achievable: Setting goals that are too lofty could be creating a high probability of failure in the future. While it’s important to aim for big results, attempting to take a step too fast could result in frustration and a lack of achievement. For example, setting a goal to increase your profits by 500% in 2020 isn’t likely achievable without specific business-building strategies in place. On the other hand, you could set a reasonable growth goal based on the trends of past years, giving yourself room to stretch just a little more.
  • Relevant: Consider how important the goal is and how much it will impact your business. Are you choosing this goal for the right reasons? Setting a goal to outsell your competitors might have too much of an outside influence, making it hard to find the internal motivation to keep pushing forward. Instead, look at specific points of success within your business that you can build on, or identify weaknesses that need to be improved.
  • Time: You need to have a clear timeline about how progress will be achieved and when you will reach the goal. Give yourself enough time to meet smaller, stepping-stone goals that will help you achieve a greater purpose in the future. Focusing on these small wins will create an environment so you are prepared to achieve bigger possibilities.

Combining these five principles can create the perfect solution that will help your business grow.

Ideas for Small Business Goals in 2020

What are the specific goals that you should be setting for your business in 2020? If you are looking for ideas, then these are some of the options that might be beneficial for your company:

  • Review 2019: It’s hard to create effective goals if you don’t know where your starting point is. Consider the current financial health of your company so you can identify areas of improvement that need to be addressed. Being aware of what is going on means that you “take off the rose-colored glasses” and look at the reality of your current situation. Evaluate cash flow, profitability, the effectiveness of marketing campaigns, business debt balances, and more. The overall goal should be to look at income earned as well as the money that you paid for vendors and suppliers. Getting clarity on these details will help you choose goals that will be perfectly catered to the needs of your company.
  • Tap into Professional Services: You are carrying a lot of responsibility if you are trying to manage the bookkeeping, tax preparation, payroll processing, and more. Instead of fumbling your way through accounting and bookkeeping tasks that you don’t know much about, consider the option to hire professional accounting services for your small business. An experienced small business accountant will be able to offer recommendations about tax strategy, as well as the right systems that can be used to track your financial information and stay ahead of all of the reports.
  • Set Aside an Emergency Fund: Even if your business is booming right now, it is important that you are proactive about preparing for a rainy day. The economy can change and all industries often experience slow seasons and busy seasons. When the sales are flowing in, create an emergency fund that can be used in case cash gets tight. Set a goal for a specific amount that you want to have in savings by the end of the year.
  • Sales Objectives: If you are looking for ways to boost profits, then consider setting a goal about your sales objectives for the year. Are your sales currently trending upward? Then you can identify ways to leverage the growth as much as possible. Are your sales currently trending downward? Then it might be time to reevaluate and set a goal to bring sales back to the levels previously achieved. Break down the numbers to see how many sales need to be made, so you hit your desired profit margins for the year.
  • Payroll Processing: Are you calculating payroll through an outdated system? Then it might be time to update your payroll processing system. Set a goal to implement a new software that provides automatic calculations. Or, better yet, outsource payroll processing to your bookkeeping and accounting team so you no longer need to worry about the busy work every time payday rolls around.
  • Collections Systems: One area of improvement that commonly needs to be addressed among small business owners is to create a better system for follow-up regarding outstanding invoices. Outstanding customer invoices will take a toll on your cash flow, which can have a domino effect on inventory management and your ability to pay overhead costs. Design and implement an efficient system to track invoice due dates and follow-up when the payments are overdue.
  • Increase Deductions: If you are like most business owners, then it is common for expenses to slip through the cracks. Whether you lose a receipt or you don’t stay current with data entry, it can be easy to overlook transactions that could be used as business deductions. Set a goal to be more diligent about tracking these details. For example, your goal might be to set aside an hour on Fridays to update your expenses and review the money that was spent during the week.

Improving your business accounting system can be easy when you leverage the services of an experienced accounting team. If you are looking for support with your 2020 small business goals, then our team is here to assist. Contact us at Easier Accounting to learn more about the range of available services. We keep our focus on small business accounting services, giving you specialized services that will help your company thrive. Call right away so that you are ready to achieve your 2020 New Year’s resolutions: (888) 620-0770.

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *