With the end of the year fast approaching, there’s no better time to review and reflect on how your business did over the last 12 months, and to make preparations for the coming year. Since the holidays are about to begin, it’s time to start making your reports, checking your books twice, and finding out who’s getting a lien, and who’s been nice.
No matter how your business did this year, the coming new year presents an opportunity to do things better, or at the very least, to do things differently. Use the following checklist as a guide to give you a few things to think about as the new year approaches.
The Office Manager’s End of the Year Checklist
1. Review your current customers
No matter if the majority of your business is with folks that you’ve worked with for years, or if your customer list is filled with brand new faces, the end of the year is the perfect time to perform a “customer temperature check.”
Start by reviewing who you worked with more than expected this year, and who you worked with less than you had hoped to. If you sold to brand new customers this year, make sure to note of how these new relationships went, and what you can expect to do with these customers next year.
This temperature check should include reviewing special customer requests, late payments, outstanding payments, and those customers who seem to tie up more of your resources than other customers do. Sometimes issues like these will make the true profitability of certain customers much lower than it appears to be on paper.
You may want to evaluate which customers yielded the most successful projects, and which ones had issues. You should have an up to date preferred customer list, so you know who your best customers are.
2. Look for trends in your financials
You’re probably familiar with the phrase, “those who do not know their history are doomed to repeat it.”
You most likely already look at your financials month over month, but now it’s time to view the big picture and spot your past year’s trends. Trends are important for planning ahead: reviewing a year’s timeline of financials will give you insight into your busy and slow months. You can review months based on how many new projects were started, how many new customers you obtained, as well months with the most (and least) net profit.
3. Close out any outstanding invoices
You may have open invoices that have been slipping through the cracks – it happens to all of us. It’s time to close out those books and get paid. If you’re absolutely sure that you won’t be paid on certain invoices, prepare to report the lost revenue as bad debt in your financials, but also consider the options you may have. If you have remained unpaid on a construction project, you may want to consider filing a mechanics lien or a bond claim.
4. Review your collections policies and performance
Had a project go rogue and didn’t receive payment for your labor or materials? Do a thorough “post-mortem” on that project to see how everything was handled, and try to identify areas where a different tack may have yielded better results.
Evaluate how your business handled your lien rights in this situation. Note projects where lien rights were lost due to avoidable missteps, such as a signing a waiver before receiving payment, or getting burned by a missed deadline. Take into account your notice and lien policy, and create a game plan to rectify any gaps in your policies that leave you vulnerable.
5. Start setting goals for next year
It’s time to start planning those resolutions for next year. While looking at your preferred customer list, plan on ways to get more of your customers on this list – whether it’s leveling up your relationship with a customer who’s not on the list, or by getting new customers.
It’s a great time to make plans to get more customers, such as email marketing campaigns, advertising plans, or asking your existing customers for referrals. You can use your review of the previous year to model your predictions of expected growth, profits and losses by month for the next year.
It may also be time to change up your accounts receivable policies. There’s no better time than the new year to announced revised payment policies, such as late fees for unpaid invoices, and to start rolling out a new notice plan to keep your lien rights secured.
