Financially Adjusted

#32: 4 END-OF-THE-YEAR IMPORTANT FINANCIAL TO-DO'S

• Leslie Roth • Episode 32

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In this final episode of 2024, I’m helping you go out strong with actionable financial tips for your chiropractic business. Whether you’re DIY-ing your bookkeeping or working with a professional, these four financial tasks will help you smoothly transition into the new year. Here’s what I’ll walk you through:

  1. Reconciling Your Accounts
  2. Reviewing Your Financial Statements
  3. Organizing Tax Documents & Communicating with your Tax Professional
  4. Updating Your Financial Goals

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Recommended payroll software (affiliate links):
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GUSTO

Recommended bank and the one I use in my business (affiliate link):
RELAY BANK

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My favorite budgeting app w/ an amazing free version:
EVERY DOLLAR BUDGETING APP

My preferred business credit card with cash rewards (affiliate link):

If you have healthy behaviors around spending with a credit card, this is a great one to use and earn cash back. It also links up well with QuickBooks Online. If you have unhealthy spending habits with credit cards, please avoid using one! You need to be able to pay it off monthly and not carry a balance. I use this one for my business and it makes paying bills

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Disclaimer: This content is for educational and informational purposes only. Please consult with an accounting professional for direct advice based on your specific business situation.

What's up my entrepreneurial friend! Thanks for joining me today for the last episode of 2024 for the Financially Adjusted podcast.

It's been a busy but a good year for me. I started this podcast back in May and I plan to continue bringing you all kinds of valuable information to run your chiropractic business in the new year. Really my content can help a lot of small business owners out there, but I really cater to chiropractic entrepreneurs because they are my people that I help all the time with my bookkeeping business. So, I am definitely going to be talking more about chiropractic businesses, but you are more than welcome to tune in with me if you're a different type of business.

I have lots of podcasts ahead of this one so you can go back and listen to whatever applies to you and your business and whatever you need to learn.

I am so grateful to you for tuning in with me and I think it's great that you're plugging into content that can help you manage your money better in your business. Running a business is not an easy road to travel with this twist and turns, but it's my goal to help you navigate the financial side of this.

How has this year been for you in business? Did you achieve all your revenue and profit goals? Did you set them at the beginning of the year or did you follow-up with those throughout the year? If not that's okay. You can do that for the upcoming year. Don't beat yourself up over that but I do encourage you to think about the year ahead and think about the goals you want to achieve. And check-in with those goals throughout the year. It's really helpful to keep you on track and to really tweak and redefine what those goals are and if they've changed throughout the year.

The end of the year is a great time for that but also really any time throughout the year that can be done. Nothing is ever set in stone and your life and your business changes so it's not a big deal if you want to pivot at any point in time. If you're someone who started a new business this year, what do you think so far? How's it going? Was it easier or was it harder than you expected it to be?

I applaud each and every entrepreneur out there, no matter where you are in your journey, because it takes some real courage to go it alone and build something. I personally think it's one of the coolest things you can do, and the benefits far outweigh the negatives. Okay, so let's get into today's episode. I'm going to be talking about four of the most important financial to-dos to put on your list for the end of the year. So, we are ending the year with some very tactical advice. But this is advice that if you follow this you will transition smoothly with your finances into the new year, and it will help you to feel so in control of what you have going on and give you financial clarity.

Task number one of the four that we're going to talk about is reconciling your accounts. This includes your business checking, savings, credit cards and even any loan reconciliations. This means you're matching your accounting records to your bank statements to ensure that everything was accounted for and accurately accounted for. Why does this matter? Unreconciled accounts can lead to errors on your financial statement which could mean inaccurate tax reporting or even lost money lost deductions on your taxes.

You want to make sure you're accounting for every single tax deduction that you can. And if there's a missing transaction, a reconciliation is going to cover that. If you are DIYing your bookkeeping, it's important to try to stay on top of this throughout the year and do this for each account each month. So that you don't have a mess on your hands by going back and figuring out the entire year at a time.

It can be a little harder to investigate if something isn't reconciling, when you're doing it later on way after that month has taken place.

If you have an outsourced bookkeeper who's doing this for you or an in house bookkeeper that's doing this for you, make sure you're giving them access to all of the statements that they need throughout the year. They should be able to get your bank account statements, credit card statements, and loan statements each month to reconcile those properly on a monthly basis. For loans they need to know what portion of each payment principal and what portion is is interest so that they can account for that properly.

And make sure that your numbers are correct on your monthly report that you're working with accurate numbers.

Sometimes loans are reconciled only on an annual basis. That can be kind of a common thing, but I want to urge you to do this monthly and if you do have an outsourced bookkeeper or accountant, ask them if they could please do this monthly for you and then your job will be to provide them the statements that they need to work with each month working with those accurate numbers will just help you to make better business decisions throughout the entire year, and helping you to also stay on top of your budget and have a realistic budget based on what you have going on. So, the principal portion of each loan payment is going to lower the amount that is on the balance sheet. The loan amount and then the interest portion of each payment will show up as an expense on the profit and loss statement. Just so you're aware of how those loans function within your financial statements. So especially if you're DIYing your bookkeeping that's a common mistake that I actually see a lot is those entrepreneurs who are DIYing, They are categorizing the entire payment as a principal payment or as an expense. And that's incorrect. You’re throwing off all of your numbers and you're not working with accurate numbers if you're doing that, so this is a really important one to understand and get right when you're reconciling your accounts. So, whether you're DIYing, or you have an outsourced bookkeeper, doing this you should really know and be aware of, whether your loans are being categorized properly and if they're being reconciled.

So, if you've been DIYing your bookkeeping, and you do feel like you have a mess on your hands, and you're confused about what's going on or how to fix that. Now might be a good time to look at hiring an outsourced bookkeeper. Make sure you're hiring someone who will give you monthly reports and who will help you navigate those reports on a monthly basis.

But now is a really great time to reach out to someone before you get into the thick of tax season. Even though bookkeepers aren't doing taxes they have a lot of work on their hands, getting those books prepped for the tax professionals to be able to do the taxes. So, make sure you're staying on top of that and being pro if you're trying to hire anyone right now.

Task number two of the four that we're going to talk about for the end of the year is reviewing your balance sheet and your profit and loss statement, you should be taking a close look at your profit and loss statement for the entire year, and it's a great chance to thoroughly compare your revenue because this document it's going to tell story of your revenue your expenses your profitability for the year.

And it can be really helpful to compare all different months that occurred in the year as well as comparing the year that you're in and that you're finishing up with prior years, just to see know what your revenue projection could be for the upcoming year and how much you've grown over the last few years. There's very much a lot of insight that you can gain from looking at this profit and loss report. You'll also want to take a look at your balance sheet for the year. This will list out your assets like bank accounts and equipment.

And it'll also list out your loans and your equity in the business. You'll be able to see what your total debt is and how much money you've taken out of the business. Throughout the year in draws or distributions. If you're feeling confused about navigating either one of these reports, I have two episodes where I walk you through each report and help you under and what they're made up of and how to navigate them as well as what to focus on. So, those are episodes eleven and twelve and I'll make sure to link those in the show notes.

It's helpful to compare your actual numbers to your budget or your goals for the year. Did you spend too much on advertising and marketing? Were your staff expenses a little higher than you expected?

For many chiropractors, the higher line items on your profit and loss statement tend to be advertising and marketing, payroll expenses and office expenses. Sometimes meals as well. But sometimes I see education, coaching and consulting, also creeping up to a really high amount in comparison to your revenue. So, these are just ones that you want to zone in on and make sure staying within a healthy range.

And I actually created a free sample P and L for chiropractors, where you can get an idea of what a healthy P and L could look like and what the different expense categories should look like as far as how much you should spend in each one of them compared to your revenue. So, definitely grab that if you haven't yet. It could be a really handy tool to just use that and compare it against your own. You can just find that at financiallyadjusted.com under free resources. And it's very easy to find there. But this review of these financial statements is going to help you pinpoint areas strength and areas for improvement so that you can adjust your budget and your goals for the next year. And a pro tip is to look at expense categories as percentages of revenue to see if they align with benchmark for your industry.

So, if you are not sure what benchmarks to use check out that free profit and loss statement that I just mentioned is that's tailored specifically to chiropractors and your businesses and your expenses.

Alright, number three is organizing your tax documents and communicating with your tax professionals. Taxes are right around the corner so now is a great time to get your documents in order. It's good to gather receipts, invoices, payroll records, any 1099’s that you've issued or received in the new year will be necessary to gather. So, if anybody sends you 1099’s for work that you did for them you're going to get it’s supposed to be sent out by the end of January. So, that's one that you're going to want to grab at the beginning of the year, make sure you have all of that for your tax professional. If you are cringing a little bit because you feel your stuff is all over the place, you're disorganized, now is a fantastic time to get organized.

I have a whole episode about getting organized in your business and I also have a free PDF guide That will walk you through how to get organized with digital and paper documents, and various systems that can help you do this. Being organized is a game changer…and gives you more control and confidence in your business and it's a huge part of having a solid financial foundation…

I'll link the episode that I did and the free guide in the shown that you have easy access to that But it's episode thirteen. And you can easily find any of my financial resources that I have for free on my website you'll just see free resources right at the top of the website. Another part of being organized for taxes is making sure your bookkeeping includes all your tax-deductible expenses like equipment, continuing education…or any equipment you purchase throughout the year for your practice. Ideally you want to make sure that anytime you purchase equipment it's being recorded in your books. If you have a bookkeeper, make sure that you're giving them all of your loan documents so that they know that a loan exists, or a piece of equipment exists. And you need to notify them as soon as you get any new ones. In any new credit cards, loans, anything you make sure you always notify your bookkeeper.

Also make sure you tell your bookkeeper about any business expenses that you paid for with personal funds because they're not going to have any idea that those exist unless you tell them because most times whatever's on their radar is just through your business accounts. So, make sure that you're keeping them up to date with anything you've paid for with personal expenses or with personal funds. If you have accounting software that is cloud based like QuickBooks Online, you should have all of your bank accounts and credit card linked up to that so that your transactions can flow through automatically. It makes things so smooth for everyone involved. 

If you're looking for a great new business bank account that actually works well with accounting software like QuickBooks online, check out Relay Financial. I’ve been talking about this bank a lot lately. And I'll have a link to it in the show notes, but I recently switched to Relay Financial and it's awesome. I use this for myself and then I have a few clients that use it and it integrates really well. It functions really well and I have other episodes where I kind of go into more detail about the different benefits that this bank offers for businesses.

So, episode 29 can go back to that and I list out my favorite tools so you'd hear a little bit more in detail about this bank.

I have a pro tip for you:  if you are working with a tax professional, reach out and schedule a meeting with them before for the end of the year. Don't wait until January to do this. There are a couple reasons why you don't want to wait until the new year to do this. Tax planning is a very different thing than tax compliance. Tax compliance is simply just filing your taxes when you're supposed to and staying on top of that. After the end of the year there are many tax strategies that aren't available to you anymore. So that's why it's important to do tax planning and work with someone throughout the year and talk to them before the end of the year.

When you have the time, and the window is still open to implement some tax strategies. Get into tax planning versus just tax with your tax professional.

So, if you don't have a lot going on in your business, it's pretty straightforward. You might only need to meet like mid-year with your tax professional, but it's very important that you talk to them about what you have going on in your business throughout the year so that you can make any changes necessary to benefit you at tax time. If you need to find a tax professional or a bookkeeper, the end of the year is an excellent time to do this like I mentioned earlier do this now because, bookkeepers and tax professionals are going to be busy issuing 1099’s in January and then they're going to go right into the tax season and every tax professional is going to be completely overloaded with meetings and tax prep.

I did an episode on finding the right professional to work with. I think it's episode 10. I'll link that in the show notes as well. It's very important to work with financial professionals that are a good fit for you and to all collaborate together for your financial well-being. If you haven't yet, make sure you introduce your bookkeeper and your tax and your financial advisor so that they can easily communicate with one another, especially the tax professional and the bookkeeper.

If you have accounting software like QuickBooks online, which is what I recommend, add them both as accountant users, and then they can both see your books from their accountant dashboard and then everyone is on the same page It makes things really smooth and seamless.

Alright, the last task that I'm going to talk about today task number four is reviewing an updating your financial goals. Every year at the end of the year and throughout the year you should be revisiting your financial goals.

You want to ask yourself what worked this year? What didn't work this year financially? Set specific goals also for the next year whether that's increasing your monthly revenue by a certain percentage, reducing overhead costs, or building up your emergency fund.

And I talked earlier about how you should be evaluating your financial statements. This is going to lead you right into your financial goals and integrate with this planning for the new year because you're going to be evaluating what happened in past and that's going to affect what you decide for your goals in the future.

In episode 24 I talk about aligning your money with your goals. This episode will help you understand the how and the why behind coordination of a budget and your goals. So that'll help you think through this process of projecting ahead, projecting forward, and creating your budget and just thinking about your goals while you're doing that so that you can tweak your budget and form your budget so it does align with your goals and it helps get you there faster.

And you can get as granular as you want when it comes to setting goals. Some people like to have very specific goals for each quarter and some have more of an annual goal. 

If you have a variable income it becomes very important to make your goals quarterly and revisit them more frequently. For instance, for chiropractors, each quarter going to likely be a little bit different for you. You're going to have different seasons where you're a little bit busier than others. If you've been doing this for a while, if you've been in your business for a while, you probably know those quarterly trends in revenue and when you're performing better. If not, you can pull your P and Ls from prior years and take a look at what your trends were. This is really going to help you with setting realistic goals.

Budgeting is hands down one of the best things you can do to be proactive in your business if you haven't started a budget or you fell out of doing it. Get started now. If you budget, try to project out for at least six months. I talk about budgeting a lot so you can easily find info on that and get help with that if you go back. Episode 2 is a great one and I also have a budgeting tutorial on YouTube. But overall being proactive versus reactive is a total game changer.

Looking at your P and L monthly quarterly and annually is necessary and so valuable. But this is historic information. You're just looking back. You're looking in the rearview mirror. Creating a budget is proactive and projecting forward.

This allows you to make necessary changes that will help you stay in a healthy financial position. It's about looking through the windshield not the rearview mirror.

Alright, pro tip around all of this -  break down your big goals into actionable steps. So, it's not just this big idea that's sort of mysterious floating out there. You need to make it real.

So, for example, if you have a goal of saving $20,000 in your practice's emergency fund, or whatever maybe six months of emergencies are for you. Find out and calculate how much you will need to set aside each month to get to that, and how long it's going to take you and budget and map out how much you can set aside for savings goals. Or equipment. Whatever your goal is, look at your budget and know how much you have to set aside.

Another great thing to evaluate is your personal financial goals. It's good to do this while you're doing your business goals every year. Your business and your personal financial goals are so tightly intertwined, and they need to be coordinated together. So, if you have a big personal financial goal and a big financial business school, your business dollars are going to need to be balanced accordingly because they're going to be competing. Those goals are going to be competing essentially.

And you'll need to look at everything realistically in order to achieve what you want to achieve and prioritize. So, you need to decide what are your bigger priorities right now.

For instance, let's say if you're a chiropractic business and you have some equipment, and that's going to need replaced. That's something to consider for business goals.

Let's say that you also know for your personal side and your personal goals you are going to need to get a new roof on your house this year. And your goals may not be this big but whatever they are, look at both sides of it personal and business. Projecting out a business budget will be the one thing that's going to tell you whether or not you can do them both or you have to prioritize one over the other.

Can that drop table wait until another year? Can you get by this year in your business with your old drop table or whatever it is that you need? Or can the roof on your house weigh for another year? Is it not in such bad shape that you necessarily need to get that done this year? I want you to cash flow things and not go into debt to make them happen. The only way you can do that is by thinking ahead and planning for it. A budget is an absolute necessity in your business and your personal life and the two of these must be done in tandem in order to be real stick about it and meet your goals.

Alright, that wraps up the four important to dos for the end of the year. Hopefully you are not too overwhelmed. Remember, you just take it one step at a time and you don't have to be perfect at it. You can step forward imperfectly, gain some clarity, and get better at the budgeting thing and all of these different things.

And I have a lot of resources for you so always go back find a podcast episode that can help you or find a free resource that can help you. I hope that you feel inspired to plan out your next year and are getting excited about it. But I hope this helps you to map out your action steps. For ending this year and starting the new one and helps you stay focused and feel like you're supported.

Being proactive can seem very overwhelming, especially if you haven't done that. If you haven't done a budget before, if you haven't really thought that way before. So, it can definitely feel very overwhelming, but once you get into a flow each year and each month it'll just be something that you do without thinking about it.

It can bring so much needed peace of mind when you think ahead and plan in your business versus always looking back and scrambling at the last minute. Being a business owner is hard enough, make it easier on yourself by taking the time to manage your money properly.

You work really hard for it, and this is a big way that you can protect your business and your livelihood.

I'm here to help you in your entrepreneurial journey and simplify money management. Send me any questions you have. You can text me via that hyperlink that you see in the show notes. You can email me at support@financiallyadjusted.com or you can send me a DM on Facebook. I am Leslie Roth or Financially Adjusted is my business page.

You are definitely not in this alone my friend.

And remember action brings clarity, and imperfect action is better than none at all.

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