Calendar Year End Prep for Government Contractors
The end of 2022 is fast approaching, and there’s a lot of work to be done to make sure everything is wrapped up nicely for 2023. The better you’re able to get things in order now, the less catch-up you’ll have to play next year.
In this article, we’ll talk about some things you can do to get ahead of the game and be prepared for a successful next year.
First Thing First – Take a Moment to Breathe and Reflect
It’s hard to believe that the clock is just about to turn to 2023. To be honest, we’re still processing 2020. But here you are, ready to turn the page onto another year and start fresh to make these coming months your most successful yet.
Take a moment to reflect on this past year. What were your biggest wins? Did you land some contracts that really elevated your business? Dig into your successes and analyze what you did that worked, and what you could do better. Be as honest as you can about your failures as well as your wins, and take a long, good look at how you could have done things more efficiently, professionally, and successfully.
Experience is one of the most powerful tools in government contracting, so make sure you’re getting the most out of yours while looking ahead to the new year.
Know Your Deadlines
Government contracting is a very deadline driven industry, so it’s important to have your due dates and requirements written down somewhere in an easily accessible format. You don’t want to be scrambling at the last minute or miss out on contracts because of a poorly organized system.
Perform a Cash Flow Analysis
It’s important to have a good idea of how much money you’ve got coming in and where you sit financially before planning ahead. Analyze your cash flow so that you can prepare a budget and know where you’re at going into the end of the year.
One way to go about this is to track your cash in and your expenses on a monthly basis. This will give you a good idea of where your money is going and what areas you can cut back on.
If your CFO is up to their neck in work, you can use a consultant to help you with your analysis while saving your own staff time for more pressing things. This is also a good idea if you’re not sure where to start or if your financial situation is more complex. At BOOST, we can help you get a clear picture of your financial situation heading into the new year.
The bottom line is that you want to ensure that you’re using your cash as efficiently as possible for your business objectives and goals, tax planning, and capital injection needs. Having a clear view of your cash flow will help you accomplish that.
Plan Your Company’s Budget for the Next Calendar Year
Once you have a good handle on your cash flow, it’s time to start preparing a budget for the next calendar year.
There are a few things to keep in mind when doing this:
-Your company’s overall financial goals
-What worked and didn’t work in the current year’s budget
-Changes in the market or industry that could impact your company’s finances
-Any big projects or initiatives that will be taking place in the next year
It’s also a good idea to get input from your senior leadership when putting together the budget for next year. They may have ideas of where money can be saved or areas where they’d like to see more investment. You should also select a budgeting process that fits your way of doing things, i.e. a bottom up vs. top down process, etc.
Prep for 2022 Taxes
Before doing anything, know that you’ll want to work closely with your CFO and your tax accountant when doing your tax prep. They’ll be able to help you figure out what deductions and credits you’re eligible for, as well as give you an estimate of how much you’ll owe.
The first step is to get your books in order. This means making sure all of your expenses are accounted for and that your revenue is accurate. You’ll also want to make sure you have all of the relevant documentation for your expenses. This can include receipts, invoices, and bank statements.
Getting your books in shape will go a long way towards making tax time less stressful. You’ll have everything you need and you won’t be scrambling to find documentation at the last minute.
The next step is to start thinking about deductions and credits. There are a lot of different deductions and credits that businesses can take advantage of, so it’s important to do your research and figure out which ones apply to you.
Your tax accountant will be able to help you with this, but it’s a good idea to have an idea of what’s available. That way, you can make sure you’re taking advantage of everything you’re eligible for.
Some common business deductions include:
-Office expenses
-Travel expenses
-Employee benefits
-Business insurance
-Interest on business loans
There are also a number of different tax credits that businesses can take advantage of. These can include credits for hiring employees, investing in research and development, and more.
Again, your tax accountant will be able to help you figure out which credits you’re eligible for. But it’s a good idea to have an understanding of the different types of credits that are available.
The last step is to start estimating how much you’ll owe. This can be tricky, as there are a lot of different factors that go into it. But your tax accountant will be able to give you a good idea of what to expect.
At BOOST, we can help you get your taxes in order and make sure you’re taking advantage of all of the deductions and credits you’re eligible for. We’ll also help you estimate how much you’ll owe so that you can plan ahead.
BOOST Can Help You Prepare for 2023
At BOOST we’re a team of experts dedicated to helping small and mid-size government contractors handle their back-office operations, so you’re free to focus on the more important stuff. We’ll help you stay compliant and stay on top of everything from human resource operations to your accounting.
If you’re a government contractor, and you’re looking for some help, contact us today and let’s talk about what BOOST can do for you.
