Prep Your Farm Business for the Year’s End
November 9, 2021
The days left on the calendar are quickly dwindling away, and it’s time to start preparing your farm business for the end of the year. With the hustle and bustle of the holiday season hastily approaching, now is the time to look over business details to help make your transition into the new year much smoother.
Cheri Hoffman, a volunteer business mentor with SCORE’s Tip of the Mitt chapter, recommends these tips:
Prepare Financial Documents
Gather your key financial documents. These should include:
The balance sheet report, showing all the assets, liabilities and equity.
The income statement report, showing revenue, expenses and profit.
The cash flow statement report, showing opening and closing cash within a specific period, with inflow and outflow itemized.
Verify Employee Information
Now is the time to confirm all your employees’ information is up-to-date.
“Verify all employee information, including, name (if anyone got married or divorced), address and Social Security number. You need to do this for all current and former employees in preparation for distribution of W-2s,” Hoffman says. “Employees can be reminded to update this information through an email or by a message on their pay stub. Issue new W-4s for any employees who need to make changes in their withholding status.”
Within the coming weeks, employees will likely want to use up any remaining time off. According to Hoffman, verify your employees use of paid time off, including vacation, personal and sick days. It’s also important to go over time off policies with your employees. “Does unused time roll over, get paid at a discount, or is it a matter of use it or lose it? Notify your employees of their status,” Hoffman says.
Review Insurance Policies
Taking the time to review your operation’s insurance policies might seem like a daunting task, but it’s important to review these annually to make sure they fit your business’s needs. According to Hoffman, some questions to ask include:
Are there any significant changes to your worker’s comp policy since your last audit?
Is your business auto policy coverage adequate based on your current circumstances?
Do you have a liability policy? Is it adequate?
Have you shopped for competitive quotes?
Review Lease Agreements
Similar to reviewing insurance policies, lease agreements should also be reviewed annually. Will there be any changes with the new year? Sit down with landlords or tenants to discuss possible adjustments.
“While this should be standard practice all year long, now is a good time to make a point of ensuring that you have a backup copy of all records, including contacts, financial information, etc.,” Hoffman notes.
An important part of looking toward the future is noting how far you’ve come. Make a list of your business accomplishments this year and share it with all stakeholders. Be sure to thank everyone for their contributions, Hoffman notes.
“A little appreciation goes a long way and does not cost anything. Set goals for next year and share those as well,” she adds.