Maintaining a successful small business requires a constant eye on financial planning, tax strategies, and future trends all year long. However, these initiatives are especially important when the 4th quarter arrives.
Financial and tax planning in the fourth quarter accomplishes a range of goals, from ensuring a successful 2024 to minimizing taxes before the end of the year to setting the stage for a successful 2025.
The objectives of tax planning and financial planning are distinctive for every business and industry. Today, we will discuss a few broad strokes moves you can make now to ensure your fourth quarter launches many successful months to come.
Review and Assess Current Year Performance
The fourth quarter is the ideal time to take stock of your performance during the first four months of 2024, and these efforts are twofold:
- Financial review -Analyze your year-to-date financial performance against the goals you outlined at the beginning of the year and take stock of how you measured up (as well as any gaps in revenue or extra expenses that you did not account for in your initial planning for the year.)
- Operational review – Evaluate your operational efficiencies, including your staff productivity, your customer satisfaction, marketing strategy success, and any adjustments made due to unforeseen circumstances or market changes throughout the year.
This research helps create a blueprint for future initiatives and changes to your current operations and financial structures based on historical data on successes and setbacks.
By understanding the ebb and flow of the first nine months of 2024 you’ll have a clear idea of how to move forward in the fourth quarter and the upcoming year.
Focus on Your Tax Planning Strategies
The fourth quarter is your last chance to minimize your taxes for 2024, (and start planning for the 2025 tax year), and you can accomplish in several ways.
Identify Possible Deductions to Lower Taxable Income
There may be initiatives you can launch now to lower your taxable income when tax season rolls around. This can include work expenses and deductions like conducting repairs, investing in new equipment, creating an updated marketing strategy to align with significant retail events like Black Friday, and much more. Think about the work expenses you’ll likely incur this year and next. Therefore, if it’s financially beneficial, make some of the purchases now to lower your taxes when April 15, 2025, rolls around.
Defer Income
Another way to save on your 2024 taxes is to defer income until the start of 2025. For example, you can send out invoices in January instead of December so that any end-of-year revenue is applied to the 2025 tax year, not the 2024 tax year.
Look to the Future
Tax planning in the fourth quarter considers both 2024 and 2025 expenses. For example, suppose you expect higher revenue in 2025, leading to higher taxes. – Therefore, waiting on tax-deductible expenses may be smart until January or accelerating income instead of deferring income.
A tax planning professional like Saddock Advisory can help you take an in-depth look into these fluid tax situations, and your 2025 expected revenue and income. It can also help you create the best tax strategy to save money this year, next year, and many years ahead.
Set Your Goals for 2025
The fourth quarter is also the best time to keep an eye on the future by setting your goals for 2025. This process is both strategic and multi-faceted and includes a thorough examination of the following:
- Setting measurable and achievable financial goals, which include both income and expenses.
- Setting measurable operational goals, like staff performance expectations, marketing strategies, or new ventures that may add income to your business.
- Aligning goals with your long-term business strategy and more considerable market opportunities. Any goals require attention to how the market is changing, both in your industry and in general, so it’s important to ensure that your goals and strategies align with these future financial trends.
The Best Way to Get a Jump Start on Fourth Quarter Planning is with an Expert
The fourth quarter is the best time for financial and tax planning. However, for most businesses, it’s also one of the busiest times of the year. This is why you need an expert like Saddock Advisory to guide the way. Our expert teams will spend ample and dedicated time on these strategies that you may not have the bandwidth or resources to accomplish.
Reach out to our team today to get started. Together, we will examine your goals now and, in the future, and ensure a boost in success in the months and years ahead.
