504: Year-end Closing And Planning For Construction Business Owners

This Podcast Is Episode Number 504, And It's About Year-end Closing And Planning For Construction Business Owners The end of the year is typically a reflective time. Something about that lull between holiday festivities and New Year's Eve sets the stage for introspection and review. While you're busy reflecting on the year ending and making plans for the new one about to begin, make sure you take some time to consider your finances.  Preparing your End of Financial Year (EOFY) information often feels stressful—there are receipts to sort out and reports to review. You must ensure you have all the necessary information about your income and expenses. It can be overwhelming, and it can make the EOFY feel daunting. The end of the financial year isn't just a time to collect receipts and find invoices. It's also a time to reflect on how your past year went, what went well and what didn't, and what you can change for next year. Here are three tips to make the most of your end-of-financial year: 1. Consider redoing your files One of the most overwhelming parts of the end of the financial year is finding all the invoices, receipts, and reports you need to file your taxes correctly. Pay attention to how easy it was—or wasn't—to find what you needed this past year. Did you have to search 15 different places for all your receipts? Did you have a combination of online and physical invoices? Did you have clearly labeled folders for everything? Did you leave everything for the last minute? If you found yourself searching high and low for every piece of paper you needed, you might want to consider revising your paperwork, so it's easier and less time-consuming to manage. Can you keep track of everything through software and apps? Is there technology or equipment that can help you? Is it worth investing in a filing cabinet? The effort you put now into sorting your paperwork will pay off hugely every year when you can quickly and easily find all the information you need. Let's face it; you'll come up against the end of the financial year every year, so you may as well be systematic about it. 2. Reflect on your year The end of the financial year is a perfect time to reflect on how the past year went. Celebrate the big successes, but remember to focus on other victories. Even if you didn't meet your financial targets, did you survive a particularly tough year? Did you manage to pivot your construction business and try a new model? Did you take some risks and learn from them? Did you grow your business or expand your offerings? It's great to have goals for each year and celebrate when you achieve them, but it's also important to look at where things didn't go according to plan and how you grew from those situations. You may need to refine your business plan if you're not meeting your financial targets or rethink how you arrive at your goals in the first place. Do this before you start planning the year so you can revise your strategies in the future. 3. Plan for the future Now that you've reflected on what went well and what went sideways, you can better plan for next year. Research upcoming events and schedule your marketing calendar. Plan to address slow times or busy periods. If you didn't meet your financial targets last year, either change how you set your goals or your strategies for achieving them. Many retailers offer significant discounts at the end of the financial year. Does it make sense for you to make a purchase right now? Should you buy new equipment, technology, or other goods now? It may be worth it if you have the money to do so and need those items. Although the end of the financial year can feel stressful, it's also a fantastic time to reflect on the past year and celebrate your achievements. You can take the time to plan and incorporate the lessons you learned from the past year to make the upcoming year your most successful. If you made your goals, that's great! If they fell by the wayside, look at what you could have done differently. Or, take some time to set a more manageable goal to get that sense of accomplishment next December. Construction is a tricky business, and people's failure is common. Most of our clients and people who reached out have failed or come very close. Very close doesn't mean failure because it doesn't matter how many times you are knocked down; it only matters that you learn your lessons, get up and go again. This coming January, it's time to hit that reset button or, better yet, start again no matter what day of the month, no matter where you are in your construction company journey. I chat with contractors like you every day. You tell me your stories. About your challenges in running a business, keeping up with the bookwork (accounting and bookkeeping). About estimating and bidding jobs, doing the work and collections from clients, having (or not having) employees, and paying their taxes. Talk to your clients (or reach out to your previous ones) about their needs, too. Ask them how their habits have changed, what projects they're looking forward to this new year, and the challenges they're facing or, most likely, will need to address in the coming months - roof replacement, bathroom remodeling, renovation budget concerns. Construction is what makes civilization and a civilized society possible. Because of the commitment of people like you to step out of your comfort zone and start a construction company and work it, we owe you all an outstanding debt of gratitude. Thank you for working hard through these past few years when most of us are hunkered down, choosing to continue your service, and maintaining our homes, businesses, and community. May this New Year bring you joy, hope, prosperity, and love. About The Author: Sharie DeHart, QPA, is the co-founder of Business Consulting And Accounting in Lynnwood, Washington. She is the leading expert in managing outsourced construction bookkeeping and accounting services companies and cash management accounting for small construction companies across the USA. She encourages Contractors and Construction Company Owners to stay current on their tax obligations and offers insights on managing the remaining cash flow to operate and grow their construction company sales and profits so they can put more money in the bank. Call 1-800-361-1770 or [email protected]