Money matters

In December, most businesses interpret “making a list and checking it twice” as a countdown exercise to financial and tax planning.

“Especially at this time of year,” comments Bob Hamilton, C.P.A./P.F.S., founder of Hamilton Financial, P.C. in Snellville, “I encourage clients to come in for a tax update to determine their tax liability while there is still time to take action.”

Hamilton stresses the importance of determining your firm’s financial health, what monies you need to spend before year-end and what anticipated revenues need to be earmarked as deferred income. He feels quarterly meetings are necessary to review financial statements and to create tax estimates to help prepare for year-end.

Mark Lloyd, R.F.C. reiterates that the biggest mistakes he sees made each year are not withholding enough and failing to adjust withholdings based on quarterly reviews of profit and loss statements. Principal owner of The Lloyd Group Inc. in Suwanee, this estate and retirement planning expert advises everyone to, “review both business and personal finances against a 2011 last chance checklist.” The eight areas he suggests examining are tax issues, retirement savings, investments, insurance plans, health savings and deductibles, age milestones, life changes and family considerations.

Hamilton says if companies intend on buying new equipment in the near future and has the cash, discuss current depreciation tax deduction rules with an accountant to decide when to buy. Since businesses are making virtually nothing on idle cash, ask your financial representative to suggest safe, short-term investments.

Above all, Hamilton encourages business leaders to create an annual budget then monitor it regularly. “I firmly believe that budgeting is the key to a successful business. You will know if you are on target, whether you need to spend less, increase revenues or adjust in other ways.”

For 2012, both Hamilton and Lloyd caution everyone to stay abreast of pending tax law changes and consult your financial advisor to plan accordingly.

Read more Money Matters from local financial experts:
Trends in Business Banking
How to Choose an Accounting Firm
Credit Unions Increasing Role in the Business Community