ACCOUNTS:

• Make sure you have depreciated your fixed assets, equipment and vehicles, at a realistic rate. You don’t want the written down value of your assets to exceed their market value.
• Write off any bad debts.
• Write off any slow moving or obsolete stock. Consider an on-site auction or similar to get rid of it.
• Make sure that you have not capitalised any replacement equipment that should have been written as repairs or written off equipment purchases that should have been capitalised.
• Take a good look at your cut-off procedures. Are all your supplier invoices received and posted? Have you invoiced customers for work you have not delivered yet?

PROJECTIONS TO THE END OF YOUR TRADING YEAR:

• Base your sales projections on known factors: orders received, consistent with past or repeat sales.
• Base you cost projections on current fixed costs, rents, wages and salary costs, and additional costs that you feel need to be included. Be realistic.
• Factor in expenditure on capital equipment that you feel must be acquired to maintain sales or production at the required levels.
• Make sure that apart from creating profit and loss and balance sheet forecasts, you also prepare a detailed cash flow forecast.

CONSIDER THE RESULTS. Do the results:

• Show an overall improvement or worsening of your financial position.
• Reveal a healthy cash flow.
• Point to deteriorating market conditions, falling demand for your products or services. How will this affect your planning for the immediate future and your longer-term goals?
• Point to improving market conditions, rising demand for your services. Are you in danger of over-trading?
• How will your business investors, your bankers, react to the projected results?
• Is your business providing you with an adequate return for your capital invested in the business and are you properly remunerated for the time you spend in the business?

ACTION PLAN:

Based on the answers to these bullet points you will need to draw up an action plan. Included in this plan will be scrutiny of your business tax position – consideration of these tax issues are listed separately in the following section.