Why Start January Off Right?
January is a crucial time for businesses as the new fiscal year begins. It presents an ideal opportunity for CFOs and decision-makers to establish a solid foundation, implement effective financial processes, and set a positive course for the months ahead with some top accounting tasks to focus on this January.
Setting your accounting priorities in January isn’t just about compliance—it’s about positioning your business for long-term success. By tackling these essential tasks early, you’ll reduce stress, improve decision-making, and ensure your finances are ready to support your 2024 goals. At Bright Balance, we have partnered with numerous businesses in the US and beyond to enhance their accounting practices. Here are the top five accounting tasks to focus on this January for a seamless and prosperous year.
1. Reconcile Year-End Financials
Before looking ahead, it’s essential to finalize the financial records of the past year. By reconciling all financial accounts—such as bank statements, credit cards, and loans—you ensure the accuracy of your records. Any discrepancies might reveal errors, potential fraud, or overlooked expenses that need resolution before tax filing.
Pro Tip: To make this process more efficient and straightforward, use tools like the QuickBooks Bank Reconciliation Tool or Xero’s Reconciliation Feature.
2. Prepare for Tax Season
January marks the perfect opportunity to get ahead with your tax preparation. Getting organized now prevents a last-minute scramble in April. Check out the IRS Tax Calendar for Businesses to stay ahead of deadlines.Essential tasks to focus on include:
- Collecting essential tax documents, like Form W-2 for employees and Form 1099-NEC for contractors, is crucial.
- Organizing deductible expenses and other vital tax records.
- Reviewing upcoming tax deadlines, such as quarterly estimated payments or specific business requirements, ensures you stay on track.
3. Review and Refresh Your Budget
As we step into a new year, it’s an opportune moment to align your budget with your current business goals. by assessing last year’s budget performance. This analysis can help refine your 2025 budget and allocate resources more effectively and is a great time to integrate forecasting tools like LivePlan or Fathom into your accounting processes.
4. Assess Cash Flow Projections
Cash flow is the lifeblood of any business, and January is the perfect time to review financial projections for the coming months. Ensure you have enough liquidity to cover operational costs, taxes, and other financial commitments because by staying proactive, you can avoid surprises later in the year. If cash flow challenges arise, consider strategies like:
- Offering early payment discounts to clients.
- Refinancing high-interest loans.
- Deferring discretionary expenses until revenue increases.
5. Seeking Expert Guidance
This is an ideal moment to conduct a thorough financial review and assess the necessity for external expertise and guidance. Partnering with our fractional accounting team at Bright Balance can help identify growth opportunities, streamline processes, and reduce risks associated with compliance. At Bright Balance, we are committed to supporting CFOs and decision-makers in fine-tuning accounting tasks and boosting financial performance. A thorough financial review should include the following:
- Evaluating key performance indicators (KPIs) such as net profit margin, accounts receivable turnover, and inventory management.
- Ensuring compliance with local, state, and federal regulations.
- Reviewing your accounting technology stack to pinpoint potential areas for efficiency improvements.
Get Expert Support Today
Not sure where to start? Bright Balance offers expert guidance and tailored accounting solutions to help your business thrive. Schedule a Consultation to learn more about how we can support your financial goals. Let’s make 2025 your business’s best year yet.
