New year, new you – why not start it off with some better business practices?
Now is the perfect time for small businesses to set financial goals that will help them thrive in 2025.
Accounting and financial management are the backbone of a successful business, and by making a few strategic resolutions, you can improve cash flow, streamline tax planning, and position your company for long-term growth.
Below, we’ve got the 7 smart resolutions to help your small business improve its financial management in the coming year. Let’s get into it.
1. Get Serious About Cash Flow Management
Cash flow is the lifeblood of any business. Without a clear understanding of your cash inflows and outflows, you risk running into financial trouble, even if your business is profitable on paper.
Resolution Tip:
- Start by creating a monthly and annual cash flow forecast to track expected income and expenses. This will help you spot potential shortfalls in advance and take proactive steps to manage them.
- Implement strategies like sending invoices promptly, offering early payment discounts to clients, and negotiating better payment terms with suppliers.
Keeping a close eye on your cash flow can prevent surprises and ensure your business remains healthy throughout the year.
2. Stay on Top of Expense Tracking
Many small businesses struggle with tracking expenses accurately, which can lead to missed tax deductions and inaccurate financial reporting.
Resolution Tip:
- Use accounting software like QuickBooks, Xero, or Wave to track expenses automatically.
- Make it a habit to digitally store receipts and categorize expenses immediately to avoid scrambling during tax season.
By keeping detailed records of your business expenses, you can make sure you’re taking advantage of every deduction available to you – especially for items like office supplies, travel, and vehicle expenses.
3. Plan for Taxes Throughout the Year
One of the biggest mistakes small businesses make is leaving tax planning until the last minute.
Proper tax planning can save your business thousands of dollars and help you avoid penalties.
Resolution Tip:
- Set up a separate savings account to put aside funds for taxes throughout the year.
- Review the latest Canada Revenue Agency (CRA) guidelines to ensure you’re aware of any changes to tax laws that might affect your business in 2025.
- Consider working with a professional accountant to maximize tax deductions and ensure compliance.
Being proactive about tax planning will help reduce the stress of filing season and keep your business in good standing with the CRA.
4. Review and Update Your Pricing Strategy
Inflation, supply chain issues, and market changes can impact your costs, which means your pricing strategy should be regularly reviewed. You want to remain profitable!
Resolution Tip:
- Conduct a cost analysis to make sure your pricing covers both your direct and indirect costs.
- Factor in competitive pricing and market demand to stay competitive while maintaining healthy margins.
Regularly reviewing your pricing strategy helps keep your business profitable and competitive in a constantly changing market.
5. Automate Your Bookkeeping
Time is one of your most valuable resources as a small business owner. Automating your bookkeeping processes can save hours of manual work and reduce the risk of human error.
Resolution Tip:
- Invest in cloud-based accounting software that integrates with your bank accounts and automates tasks like invoicing, expense tracking, and financial reporting.
- Set up recurring reminders for tasks like payroll and bill payments to ensure nothing falls through the cracks.
Automation saves you time and keeps your financial data up to date. This is really important for making informed business decisions as you move through 2025.
6. Conduct Regular Financial Reviews
Many small business owners only look at their financials during tax season, but regular reviews can help you spot trends and make better decisions year-round.
Resolution Tip:
- Schedule quarterly financial reviews to assess your business’s performance and identify areas for improvement.
- Pay close attention to key performance indicators (KPIs) such as gross profit margin, net profit margin, and operating expenses.
Regular financial reviews will give you a clearer picture of your business’s financial health and help you make adjustments before small issues become major problems.
7. Work with a Professional Accountant
Accounting is complex, and as a small business owner, you don’t need to navigate it alone. A professional accountant can provide valuable insights, help you optimize your tax strategy, and keep you compliant with CRA regulations.
Resolution Tip:
- Schedule an annual meeting with your accountant to discuss your business’s financial goals and challenges.
- If you don’t currently have an accountant, consider outsourcing your payroll, tax filings, and financial reporting to one. This will save you time and reduce stress.
Working with an accountant not only keeps your business on track but also gives you peace of mind knowing that your financials are in good hands.
Start 2025 Off Right with Accounting Expertise
Need help implementing these resolutions?
At Isaac Achal Professional Corporation, we specialize in helping small businesses improve their financial management, maximize tax savings, and achieve their long-term goals. From tax planning and financial consulting, we’re here to support your business every step of the way.
Contact us today to schedule a consultation and take the first step toward a more financially successful 2025!
