Mastering Your Business Finances
6 Essentials all Entrepreneurs Should Do In 2024
2024 is your year. You’ve been making a mental list throughout 2023 of the things you’d change in your business, and it’s time to implement.
These tasks are all about setting your business up for long-term success. Some are strategies to implement from day one and others may require a few months of gathering data and numbers (see #4!).
Regardless of what stage your business is at, these will help you have the financial confidence to grow, scale, and succeed.
1. Reconcile your Bank Accounts
This isn’t a one time goal or task. This is an ongoing habit you should create! Reconciling your bank account means matching up your accounting software with your bank accounts. It’s ensuring that every dollar is accounted for and nothing is noted twice.
Reconciling your business bank account is just ONE of the monthly accounting tasks you should be doing. Find the rest here with our free monthly accounting checklist.
2. Complete the Beneficial Ownership Information Report
The IRS introduced a new requirement* for all LLCs and Corporations (including S-Corps!) on January 1, 2024. This report, called the Beneficial Ownership Information report, says that all LLCs and Corporations have to report who their owners are to the U.S. Treasury Department’s Financial Crimes Enforcement Network, also known as FinCEN.
The report is super easy and quick to complete. For more information about this new guideline, check out our blog here.
*NOTE that when I say this is a requirement, it is a REQUIREMENT. You could be fined up to $500 per DAY up to $10,000. Major yikes.
3. Prioritize Tax Preparation
At the minimum, you’ll make 5 tax payments throughout the year. One for estimated taxes each quarter (4 total), and your yearly taxes due in the Spring. If you’re looking to scale your business, you should be strategizing for taxes all year long. This means maximizing deductions, tracking receipts, leveraging depreciation (like on a new computer), and maximizing retirement contributions.
Working with a CPA (like me!) will help make sure you’re doing the right things each month to lower your tax bill.
4. Plan for Seasonality
Regardless of your industry, you probably experience some type of seasonal fluctuations in business. As wedding professionals, this includes the boom in inquiries during engagement season (November through February) and the busyness of wedding season (the summer months). As a creative entrepreneur or online business owner, we see a huge slow down during the summer months and an influx of offboarding in Q4 as client’s re-evaluate their yearly budgets.
Planning for these seasonal shifts in income will help ensure you can cover expenses during the slow times. Not sure how to know when your busy time is? Take a look at your month-to-month income changes and compare these year over year. I guarantee you’ll notice a pattern!
5. Use Quickbooks
I debated putting this in here because of how often I preach using Quickbooks (it’s like … all the time!). But this list would literally not be complete without mentioning this software and the impact it can have on understanding your business’ financial health.
Quickbooks will not only make end-of-year tax prep a literal breeze, but it will help you understand where your income is coming from.
Let’s say you’re a marketing agency offering social media, email marketing, and influencer management. Understanding what portion of your income is coming from each of these services will help you understand who you need to hire and when. Quickbooks will help break out your income levels so you can see (and not just guess) what is generating the most.
Not sure if Quickbooks is the best fit for you right now? Check out our blog exploring all other accounting software products here.
6. Review your Business Structure
When you started your business, you likely registered your biz as an LLC or a Sole Proprietorship. But as you’ve grown, and your income has grown, you’re probably starting to see some big tax payments.
Generally, LLC’s will pay 20-30% of their revenue in taxes. THAT’S A LOT OF MONEY.
You’ve worked hard for it and one of my jobs as a CPA is to help keep as much of that in your pocket as possible. One of the ways we do this is by converting your business to an S-Corp when the time is right.
Generally, the “right time” to convert to an S-Corp is when your business is generating over $100,000. For more info on S-Corps, download our FREE S-Corp Guide here.
