By Steve Brillion
If you own or manage your own business, you’re probably busy monitoring operations and dealing with everyday problems. But there are a few things that you should make time to do every year. These are important for your long-term business and personal success.
1. Review your business tax strategy. A month or so after you’ve filed your tax return, make an appointment with your tax advisor. Go over your return together and identify opportunities for tax savings. Question everything, starting with whether you’re using the right form of business entity. Ask about recent changes in the tax code and how they might benefit your business. Make your advisor a “partner” in your business strategy.
2. Update succession planning for your business. Review your succession planning annually. You should have a specific plan for each key manager position, including yourself. Be prepared for a short-term absence or a permanent vacancy. Your plan might mean promoting from within or recruiting externally. An up-to-date plan can be invaluable if you have an unexpected vacancy.
3. Review and update your personal estate planning. If you’re a business owner, your company is likely to be a significant part of your estate. A good estate plan is essential if you hope to pass it on to your heirs. But your company, your personal circumstances, and the tax laws are continually changing. You should take time each year to make sure your plans are current.
4. Review your Information Technology (IT) usage and needs. Is your computer system giving you the information you need to run your business? Are your hardware and systems up-to-date and secure? Who do you turn to when you have a technology problem? Today, technology is essential to the success of any business. At a minimum, on an annual basis, you and your IT staff or outside advisors should review your in-place technology — hardware, software and support — to identify areas that need to be addressed to maximize business performance.
5. Review your internal controls. Although most companies have some form of internal controls to prevent the misuse or theft of company assets, fraud still costs American businesses billions annually. It is essential that sound internal controls be implemented to safeguard your most vulnerable and liquid assets such as cash, accounts receivable, inventory, etc. Review your controls, and make sure they are followed and monitored.
6. Review your business banking relationships. Annually, you should go over your cash balances and banking relationships with your controller or CFO. Then, both of you should meet with your banker. Ask about new products or services that could help your company. Address any service concerns or problems you might have had. Look for ways to reduce idle cash, boost interest earned, and improve cash flows.
7. Review your business insurance coverage. Don’t just automatically write a check to renew your insurance policies when they come due. Instead, you should sit down with your insurance agent every year. Review your business operations, focusing on any changes. Discuss types of risk that could arise. Ask about new developments in business insurance. Use your agent’s expertise to identify risk areas and suggest suitable coverage.
These are just some business planning strategies to consider for 2016. Please contact me at (847) 267-9600 or firstname.lastname@example.org or your tax advisor for more details.
Steve Brillion, CPA, serves as a partner in the Audit and Accounting Department of Warady & Davis, LLP (W&D) in Deerfield, Ill. W&D is a top-20 Chicago certified public accounting & consulting firm that provides a full range of audit, accounting, tax and consulting services and solutions to privately held businesses, owners, high-net-worth individuals and their families. For more than 30 years, Brillion has provided audit, accounting, tax and consulting services to a wide variety of industries, including health care, technology, real estate, construction, manufacturing, distribution and numerous service industries. Brillion’s consulting activities include general business consulting, financing structuring and negotiations, mergers and acquisition assistance and negotiations (both purchases and sales), and business turnaround services. For more information, Brillion may be reached at (847) 267-9600 or email@example.com. To learn more about W&D, visit www.waradydavis.com.