With the end of 2013 fast approaching, the time to act is now. Here are a few of the year-end financial actions you might take before the year is over to help your business:
1. Purchase new or used equipment that will help you be more efficient, reduce the time and cost to serve your customers. New equipment and used equipment is eligible for the “expensing election” under Code section 179. You can deduct the cost of the equipment you buy and put in service by Dec. 31, 2013 – up to $ 500,000.
New equipment can also give “bonus depreciation” deductions.
2. Make a last-ditch effort to collect from delinquent accounts. Offer to negotiate but get it solved and move on to more important customers.
If you can’t collect because the customer is just not able to pay the full amount owed, offer to accept a promissory note with monthly payments they can afford. Everyone hits a rough spot once in awhile. Work with your good customers and you might make a friend for life.
3. Consider selling any equipment or property that is not performing up to snuff, especially if it is fully depreciated.
4. Do employee evaluations and discuss their goals and concerns. At the same
time consider what you can do to give them the training they need. Even a
small year end bonus with a letter of thanks will show you do appreciate them. Listen to their ideas on how to improve your business.
5. Try to pay down your borrowings on the lines of credit. Work with your banker and let them know how you plan to improve in the future. If you don’t have an adequate line of credit, now is the time to start that discussion.
6. Look at the issue of independent contractors v. employees. It is a cost and a bother to do those payroll tax reports, but if the worker is really an employee, start reporting what you pay them correctly at least Jan. 1, 2014. If they are really independent contractors, get a written agreement you both sign saying they are responsible for their own income and social security/medicare taxes.
Find out if your accounting records are set up to issue forms 1099-MISC to the independent contractors at the end of 2013. IRS is checking on this more than before. Look into whether you owe workers compensation insurance premiums on the independent contractors that do not have their own workers compensation insurance account.
7. Get your financial statements up to date and do some projections.
8. Consider the choices of saving for your own retirement.
Did you hear “The cardiologist’s diet-if it tastes good, spit it out”.