Give your practice a financial health exam with this year-end checklist

It’s almost time for champagne toasts, terrible sweaters, and awkward visits from relatives. But to ensure you can enjoy the end-of-year holidays to the fullest, take some time to assess your financial health, and get your practice all set for a great 2014.

Here is a checklist of some things to think about as you wrap up for the year, pulled from sources around the Web. 

Check in on your goals from the previous year

Pull out your business plan and any other planning documents such as last year's action plan and review last year's goals.

Did your practice accomplish what you set out to do? Why or why not? Make some notes on your thoughts about your successful accomplishment of your goals (or lack of it). These will be useful when you do your business planning for the current year.

Get your financials in order

In order to figure out where your practice stands, you need to prepare (or have prepared for you) three standard financial documents that will give you an idea of where you are and where you need to go. 

The Balance Sheet is a summary of how your business is doing financially at a particular point in time. It shows all your business's assets, liabilities and equity. 

The Income Statement lets you see at a glance whether or not your business is profitable at a particular point in time by itemizing your revenue and expenses, resulting in a profit or loss. 

The Cash Flow Statement reconciles your opening cash with your closing cash for a particular period, showing you where the money has gone. To prepare a simple cash flow statement, for a particular time (such as the year just past), list and summarize your business's cash flow inflows and outflows for each of these three areas:

  • Cash flow from operating activities - such as revenues and expenses
  • Cash flow from investing activities - such as assets purchased and assets sold
  • Cash flow from financial activities - such as loans and loan repayments

This will show you the net increase or decrease in your business's cash flow over the period of time you're looking at and show you at a glance where the money went.

Once you've examined your balance sheet, income statement and cash flow statement, dig a little deeper by checking your business's current ratio, total debt ratio and profit margin. 

Gather intelligence on competitors 

Chances are good you have lost business to a competitor this year. Find out why.

Conduct client surveys

Client surveys are a great way to get feedback on what your clients want. Ask them what they need from you in order for them to keep coming back. Learn what you are doing well and what areas need improvement. Respond meaningfully to their feedback.

Review your estimated tax payments for 2013

Now that we’re nearing the end of the year, review what your business has made year to date and assess your estimated tax payments to avoid underpayments or overpayments. You’ll want to adjust your final 2013 payment (which is due Jan 15, 2014) as needed.

Reinvigorate and recognize your employees

Even if you can’t afford a big holiday party or year-end bonuses, there are ways to show appreciation for your staff. You can give them an afternoon off, or host a potluck in the office. Most important is recognition for their hard work in some way.

Conduct candid discussions with employees about the previous year’s results. Use annual evaluations to learn what they want to accomplish moving forward. Provide an outlet for two-way communication and listen.