The last thing any business wants to do is go into unnecessary debt at any time of the year. But with the end of the year fast approaching and the holidays upon us, it can be very easy to spend more than you take in and get yourself in a bad situation. Collection agencies see this with both consumers and businesses at this time of the year.
There is a fine line when it comes to ending your year the right way and hitting January 1 with more debt than you ever thought you had. With holiday parties for your company and bonuses or employee gifts costing money, you can see how the end of the year can put a business in the red very quickly.
And while a conversation with your CPA about what to spend at the end of the year to ease your tax burden is something you should do; make sure you don’t spend your business into a situation that zeros out any tax savings you might have gained.
A couple quick tips:
If you have already planned out your holiday party, stick to the budget you set earlier on in the year. (You did budget, right?)
While holiday bonuses may not be planned out until you have some up to date numbers toward the end of the year, make sure you don’t overdo it. Yes, a cash bonus is a wonderful thing for your team but don’t lose sight of your bottom line and start the year off in the red. (Don’t be a scrooge either…) It will only hurt you and your team if you start the year off on a bad note.
Be reasonable about those year-end purchases to get the tax bill down. Your CPA will have much more to say about this but don’t be in debt for 2016 before 2015 even ends. If you need it, buy it. If you don’t need it, think twice.
Enjoy the holidays and plan for a great 2016 with less debt, more profits and path for continued growth!