By Three Pillars Bookkeeping & Accounting — Helping Local Businesses Start the Year Strong
As we kick off another year here in Forest Lake, Minnesota, small business owners are gearing up for a fresh start — new goals, new opportunities, and yes… new financial responsibilities. The transition from one year to the next is the perfect time to reset your finances, clarify your goals, and get your books in order.
Whether you’re a seasoned entrepreneur or just launching your first venture, a successful year begins with strong financial foundations. That’s why we’ve put together this Ultimate Year-Start Small Business Financial Checklist — your step-by-step guide to planning, organizing, and ensuring compliance so your business can thrive.
🗂 1. Review Last Year’s Financial Performance
Before you look forward, take a clear look back. Reviewing your prior year’s financials is essential for understanding what worked, what didn’t, and where to focus next.
Key tasks:
• Analyze your Profit & Loss Statement – Identify trends in revenue and expenses.
• Review your Balance Sheet – Assess your assets, liabilities, and equity.
• Compare actuals vs. budget – Did you hit your targets? Where were the variances?
• Evaluate cash flow patterns – Seasonal ups and downs can inform your planning.
Why it matters:
Understanding your financial results will help you make smarter decisions — from pricing and hiring to marketing and investment — based on facts, not guesswork.
📅 2. Set Clear Financial Goals for the Year
Once you’ve reviewed your performance, it’s time to define your financial goals for the coming year. Clear goals keep you focused and measurable.
Examples of financial goals:
• Increase revenue by 15% compared to last year.
• Reduce operating expenses by 10%.
• Improve gross profit margin.
• Build an emergency cash reserve of 3–6 months’ operating expenses.
Pro Tip:
Use the SMART framework (Specific, Measurable, Achievable, Relevant, Time-bound) to create goals that are realistic and actionable.
📊 3. Prepare a Budget and Cash Flow Forecast
Budgeting isn’t just for corporations — small businesses benefit enormously from a well-prepared budget.
Budget essentials:
• Expected revenue broken down by month and product/service
• Fixed and variable operating expenses
• Projected payroll costs
• Capital expenditures (equipment, software, etc.)
Cash flow forecasting:
This is especially critical for small businesses with seasonal sales or large upfront expenses. A monthly cash flow forecast helps you anticipate cash shortages or surpluses, so you can plan borrowing or investment accordingly.
🧾 4. Get Organized: Paperwork, Receipts & Records
One of the most common pain points for small business owners is dealing with paperwork. January is the perfect month to clean up and organize.
Priorities:
• Gather and sort receipts from the prior year.
• Digitize documents — scan paper receipts and file them in a cloud-based system.
• Organize expense records by category for easy tracking.
• Ensure invoices are numbered and filed consistently.
Why organization matters:
Good recordkeeping saves you time during tax season, improves accuracy, and simplifies audits or lender requests.
💰 5. Reconcile Bank and Credit Card Accounts
Reconciliation is the process of matching your internal bookkeeping records with your bank and credit card statements.
Checklist:
• Compare transactions in your accounting system to your bank statements monthly.
• Investigate any discrepancies immediately.
• Ensure no bank fees or interest charges are overlooked.
Routine reconciliation keeps your books accurate and helps catch mistakes or fraud early.
🧑💼 6. Update Accounting Software & Processes
If you’re using accounting software — such as QuickBooks Online — now is the time to update settings, templates, and user access.
Tasks to consider:
• Update your company profile and tax rates.
• Review and adjust chart of accounts as needed.
• Check user permissions and ensure only authorized personnel have access.
• Back up your accounting data (if applicable).
Tip:
If you find your setup isn’t supporting your business needs, consider investing in bookkeeping support — we can help optimize your systems for efficiency and accuracy.
📑 7. Ensure Federal and State Compliance
The start of the year brings tax compliance responsibilities at both the federal and Minnesota state levels.
Common requirements:
• Prepare for filing annual tax returns
• Set up your accounting for Minnesota sales tax reporting
• Confirm proper classification of employees vs. contractors
• Review required business licenses or industry-specific permits
Being proactive with compliance decreases stress later in the year and minimizes the risk of late penalties or errors.
👩💼 8. Review Payroll and Employment Records
If you have employees, payroll is a major responsibility.
January payroll checklist:
• Confirm W-2 and 1099 information for all team members
• Reconcile payroll liability accounts
• Update payroll tax tables in your software
• Review new labor laws or rate changes in Minnesota
Local Tip:
Stay informed about Minnesota’s wage and employment regulations, including minimum wage updates and reporting requirements. Proper payroll setup protects you from fines and improves employee satisfaction.
🔄 9. Check Business Insurance Coverage
Many business owners overlook insurance at year’s start — but it’s critical.
Questions to ask:
• Does your coverage still meet your needs?
• Have you acquired new assets that aren’t insured?
• Are there new risks this year (e.g., equipment or vehicles)?
Insurance adjustments now can save substantial costs if claims arise later.
💸 10. Plan for Taxes and Estimated Payments
Unlike personal taxes, many small businesses must make quarterly estimated tax payments.
Planning steps:
• Estimate your annual taxable income.
• Calculate estimated payments due in April, June, September, and January.
• Ensure your bookkeeping system tracks taxable income and deductions.
Reminder:
Good bookkeeping simplifies tax planning and helps you avoid underpayment penalties — and that’s where expert support can be a game-changer.
📞 11. Schedule Regular Check-Ins With Your Accountant or Bookkeeper
We recommend meeting at least quarterly with your financial partner to review performance, refine your budget, and adjust forecasts.
Benefits of regular meetings:
• Better financial decision-making
• Early detection of issues
• Up-to-date insights on tax law changes
Our team at Three Pillars Bookkeeping & Accounting can help you set up a review cadence that works for your business.
🎯 12. Set Milestones & Review Monthly
A checklist is only useful if you act on it. Set monthly milestones to track progress toward your goals:
• Did revenues meet targets?
• Are expenses in line with budget?
• Did we hit our cash flow forecast?
Use your financial reports monthly to course correct and celebrate wins.
Ready to Start the Year Strong?
A solid financial start sets the tone for the entire year. When your records are organized, your goals are clear, and your compliance is up to date, you free up time and energy to grow your business.
If you’re in Forest Lake or the surrounding communities and want help implementing this checklist, we’re here for you.
➡️ Contact Three Pillars Bookkeeping & Accounting — let’s make this your best fiscal year yet:
🔗 https://www.threepillarsbookkeeping.com/
Post written by AI, Approved by 3PB
Three Pillars Bookkeeping and Business Services
763-464-6408, Office@threepillarsbusinessservices.com