Tips, Tricks, and Techniques for Creating an Accurate Look Forward
As we approach 2023, many business owners and executives are thinking about what the new year will bring. Topics like the recession, supply chain instability, rising labor costs, and inflation are at the top of their minds. Your accounting planning is integral in preparing your business to navigate these twists and turns.
A recent Forrester survey found that many U.S. business leaders are holding on to optimism. Most business leaders expect at least some increase in spending next year, while many also anticipate spending more on talent and technologies.
Companies saw their investments in digital innovation pay off during the pandemic. Meanwhile, blunt, staff, and payroll cuts did not. Yet 2023 will not be 2020 and will require businesses to plan differently from before. Your accounting planning for 2023 will need to reflect these changes as well.
These are the best steps to prepare your business and accounting plan for 2023.
NOTE: the action items we will discuss can and should be addressed more frequently than once a year – consider how to incorporate regular financial touch points throughout your business year.
1. Kicking off your Accounting Planning in 2023
- Set up a meeting with your financial advisory team to kick off your 2023 accounting plan.
- Establish meetings with your finance team and review relevant reports/metrics. We recommend you do this at least once a quarter.
- Identify your top KPIs and review them monthly or quarterly – these can change depending on the organization’s priorities. Keep them to only meaningful metrics.
2. Make sure you are working with up-to-date accounting data You can't plan where to go if you don’t know where you are. Ensure your books are in order – this will help you establish your 2023 goals with a clear financial accounting picture. This helps make tax preparation as painless as possible.
3. Officially set your accounting plan with goals and a budget Keep in mind that economic indicators are signaling more economic hardship for 2023. To start your budget, you need to understand revenue assumptions such as…
4. Project Variable Costs
Once you understand revenue, discuss any new spending requirements to hit the revenue targets, increase in business development efforts, marketing/advertising if current space and equipment meet any increase in headcount.
5. Account for how current events will affect your business
Consider how current events may need to be incorporated into your business plan or budget:
6. Consider long-term business plans When working with our clients, we always consider long-term business plans. The goals will affect your short-term accounting and decision-making.
If you wish to sell or exit the business in the next 3-5 years, that impacts your planning beyond a general desire to improve the organization's health.
7. Prepare your business taxes More than just income tax returns, be prepared for:
8) Don’t get overwhelmed by your accounting How to make sure you are not overwhelmed by your business accounting planning
A good outsourced accounting team can make sure your books are compliant and paint the right picture to help you confidently make important business decisions.
Optima Office can help, contact us at 858.283.1234