The beautiful spring flowers are out and its pollen season. Spring is my favorite season to get rid of old stuff around my house, file my taxes, onboard new clients, and make financial adjustments to my business goals. Here are my 6 simple ways to spring clean your finances.
1 | Pay Your Payroll Taxes and File Quarterly Reports
Payroll taxes for those on a monthly tax deposit schedule and quarterly reports for federal and state are due by April 15th. Avoid penalties by filing on time using a payroll system.
This is also the perfect time to make any payroll withholding adjustments and add any employee withholding changes. If you are doing the DIY payroll route or classifying your employees as contractors to avoid paying taxes, save yourself a headache and money by investing my payroll plan now.
2 | Clean Up Your Accounting System
If you are using QuickBooks Online or QuickBooks Desktop for Windows, do an evaluation of your chart of accounts, customers, and vendors. Merge duplicates, delete unused accounts or replace them with new ones, and make those customers and vendors with no business transaction for the first quarter inactive.
Also, take the time to update your invoice and sales receipt templates, and refresh your knowledge on recent changes to the software and integrated third-party apps.
3 | Review and re-adjust your budget goals
If you have been following along on my blogs, you will know that I am big on creating budgets and coming up with small plans to achieve each budget goals. If you didn't make your quarter one budget goals, find out what happened and come up with a plan to achieve your goals for quarter two.
If you didn’t set up a budget for the first quarter, now is the perfect time to do so especially after filing your tax return. I recommend you schedule a financial strategy session with your Accountant or book one with me.
4 | Review Your expenses
Do an in-depth analysis of your expenses to help you plug those cash flow leaks, review your workflow inefficiencies and help you renegotiate better vendor terms and rates.
When working with clients that have cash flow leaks and workflow inefficiencies, I look for ways to use technology to save money and cut costs. I also help clients review their vendor contract terms and rates to negotiate new ones.
And if we can’t cut cost, we discuss the option of increasing service fees for my small business owners or coming up with quarter fundraising campaigns to generate more cash flow with fewer resources for my nonprofit clients.
5 | Get Rid of Credit Card Debt
Credit card debt is one of the largest expenses I see small business owners and nonprofits struggle with all the time. Why? Because they fail to do #3 and #4 tips on a monthly and quarterly basis.
Using a credit card to run your business and paying the card off each month in full requires a financial mindset change and discipline. Think of a credit card as another form of cash. If you don't have the cash to pay back the bill in full, don't swipe the card.
If you already have credit card debt, I recommend you tighten up your expense policy and tip #3 to determine your spending habit. Stop using the card and figure out ways to generate additional cash to pay off the bill each month.
If you never implemented an expense or credit card spending policy as part of your onboarding process, take this time to create one and train your employees on how to use it effectively. Check out the 5 best tips to using business credit cards and how you can avoid credit card debt.
6 | Revisit Your Employee Training Process
I can hear you asking how does employee training impact my finances? Inefficient workflow and poor leadership decreases employee productivity and morale and increases employee turnover.
Employer turnover impacts your bottom-line by increasing your payroll costs and other costs such as recruitment, training and development, office equipment, etc.
Growthforce states that “external hires demand 18-20% more in salary than internal hires” and lists the indirect costs of employee turnover such as the lost revenue you will incur when you to have to train a new hire (source). All of this adds up to the list of large expenses you need to review in tip #4.
One way to avoid the turnover costs is to review your business workflow on a consistent basis to make sure you are operating at an optimum productivity level. Also, invest in employee retention programs that foster long-term relationships and increase employee engagement.
Using the above 6 ways to spring clean finances will help you meet your financial goals for the remaining quarters of the year. Don’t hesitate to reach out to me if you need help implementing any of these tips or doing a business strategy session.
What are some of your favorite spring cleaning tips you use in your business?