- Cash Flow — No matter what time of year, your #1 financial priority should be to stay on top of cash flow. How much money do you have in the bank today, and how much will you have tomorrow, next week, next month, and in six or twelve months from now?One quick tip for tracking your cash: update your books as frequently as you need to know how much cash is in the bank — usually somewhere between daily and weekly. If you have to call the bank to know how much money’s in the bank, your bookkeeping system’s not giving you the support you need to run your company.Regardless of the method, remember the mantra: must…know…cash…flow.
- Books to Tax — Your #2 priority, if your business’ fiscal year ended December 31st, is to wrap up the 2005 books and ship them off to your CPA. Speedy tax returns help you:
- Make tax-related cash flow decisions
- More quickly file your personal income tax returns
- Respond to requests for information from your investors or banker
- Focus on 2006.
- This Year’s Earnings Target — Speaking of 2006, your #3 priority should be setting this year’s earnings target. Revenues (”sales”) are great, but usually more about ego than financial performance. Earnings (”profit”) are what count.An earnings target might just be the best management tool ever invented. So pick a number: how much profit do you want your business to generate this year? It could be $20K, $200K, or $2M — you decide. But agree on the number with your key people, write it down, and hold yourselves accountable.
