4 Things Small Business Owners Should Do Before Fiscal Year End

By Odysseas Papadimitriou

It might feel like the year is far from over. But for small business owners, it’s already time to start thinking about year-end, at least fiscally speaking. 

Many companies follow the calendar year, using December 31 to mark their annual reset. But some small businesses – and nearly 25% of the S&P 500 – stray from this norm, choosing a fiscal year that aligns with their business needs.

No matter when your fiscal year ends, there are a handful of measures you need to take in advance of the annual milestone. Here’s a four-step, end-of-year checklist that any small business owner can implement.

1. Review financials and take inventory 

The end of a year is a time to reflect and take stock. For small businesses, here are some key steps to take when the end of the year is around the corner:

• Review financial statements to maximize business deductions and prepare for tax season.
• Revisit vendor agreements to see if any changes are necessary.
• Ensure you have updated copies of all critical documents.
• Renew licenses or certifications.

All of this might seem tedious, but turning it into an annual habit can actually save you time and money. An annual review will also give you a better understanding of your business’s strengths and weaknesses. This, in turn, lets you analyze what’s working and what’s not.

2. Plan quarterly business goals

Many small businesses set annual goals. Unfortunately, this can set you up for an end-of-year dash to reach important milestones.

Instead of setting yourself up for stress, analyze your business and search for the four most impactful initiatives you can emphasize in the next fiscal year. Once you pinpoint them, assign one to each quarter. 

Then, communicate the goals to your team, and implement a plan to evaluate your progress on a monthly basis. Having these quarterly goals, and a system for tracking them, will serve as a compass, helping you stay on course.

3. Outsource tasks to save time and money

If the end of the fiscal year finds you stretched thin — whether it’s physically, emotionally or financially — consider outsourcing key background elements of your business. This might include:

• Web security
• Payment processing
• Email communications
• Social media marketing

Small business owners often fall into the trap of thinking they can save money by performing all of these functions themselves. But more often than not, you’ll end up spending far more time and money on DIY projects than you would on reliable vendors. Plus, DIY efforts often lead to  subpar results.

As an entrepreneur, trying to do everything yourself can take all the enjoyment out of your work. So why not pay someone to handle these frustrating tasks, and spend more time focused on what your business does best?

4. Boost your personal credit

This may come as a surprise, but your personal credit can dictate your ability to secure business financing. 

The majority of lenders review your personal credit reports to evaluate you for small business credit cards and loans. Why? One reason is that they usually hold customers personally liable for unpaid balances on business-branded accounts.

So if you want the best business credit card or the most affordable business loan, you’re going to need “excellent” personal credit, which typically means having FICO scores of 720 or higher. 

There are several ways to increase your credit scores, including: 

• Open a credit card and pay off the full balance, on or before the due date every month.
• Become an authorized user on a loved one’s credit card account. (This only works if there’s a long history of on-time payments on the account).
• Request limit increases on your credit cards, but don’t increase your balances.
• Pull your free credit reports from AnnualCreditReport.com and dispute any errors you find. 

As the end of your fiscal year or calendar year approaches, taking these steps will make your business stronger and help you become a more effective manager. You could even make this checklist a semiannual or quarterly habit. Your wallet will thank you!

At the end of the day, whether it’s the end of the fiscal year or not, taking these sorts of steps will make your business stronger and help you become a more effective manager. So why not go crazy and make this checklist a bi- or even tri-annual destination? Your wallet will thank you!
Odysseas Papadimitriou is CEO of the personal-finance website WalletHub, which offers free credit scores, full credit reports, 24/7 credit monitoring and customized money-saving advice.