New Year’s Resolutions for Your Business

It’s time for that annual ritual of resolving self-improvement in the New Year — exercise more, eat better, lose weight. What about your business? Should you make a New Year’s resolution to improve your business in 2016? Probably a good idea, but “improve business” is too broad. How do you measure that improvement? It helps if you start with the end in mind.

To start, pick one specific area of your business you’d like to improve. Make a statement about the different results you want in 2016. Then, use that statement to create a New Year’s Resolution for your business and a plan for achieving it.

Are higher profits a 2016 business goal? Here are three specific New Year’s Resolutions that can help achieve those higher profits:

1. Invoice Customers On Time

Be sure to invoice customers immediately after the work is performed, or on a regular schedule for longer projects. Make sure that invoices, contracts/agreements, and purchase orders include payment terms, including penalties for late payment. Automated invoicing and tracking makes the process more efficient.

2. Review Bills before Payment

Paying bills that contain errors costs money, not to mention the extra time spent correcting those errors. Verifying invoices against contract prices and receiving documents before payment reduces costs over the long run. Plus, knowing that you’re paying attention keeps vendors on their toes.

3. Monitor Finances Regularly

Avoid nasty financial surprises by monitoring actual activity vs. the plan (i.e., the budget). Effective monitoring requires up-to-date accounting records and bank reconciliations. Income or expense categories that vary from the budget more than a defined threshold, such as 10%, should be assessed for corrective action.

New Year’s resolutions are opportunities to start a new habit, behavior, or process. It could be going to the gym to get healthier, or getting more control over business finances to increase profits. Sounds like if you plan it right, keeping your 2016 New Year’s Resolutions can expand your profits and constrict your waistline.