,

5 Financial Tips for Reopening a Small Business

You may be wondering, “is it safe and financially feasible for reopening a small business?” Well, after an extended period of closures to reduce the spread of the coronavirus (COVID-19), businesses that survived the economic downturn are starting to reopen.  

In this article, we’ll review financial tips to help you with reopening a small business and stay open during these uncertain times.

1 | Avoid liability by complying with health and safety regulations

There are daily changes to city, county, and state requirements to help curb the spread of COVID-19. Live in California?  Here’s the latest from Governor Newsom.  

If your business has been closed for an extended period, you’re probably already running low on cash. Therefore, the last thing you need is to face costly fines or lawsuits for non-compliance.  In addition, non-compliance could put the lives of your employees and customers at risk. 

Research what is required to for reopening a small business such as yours.  Stay informed of the latest changes.

Do your employees need to wear masks?  Are you required to post signs about coronavirus?  Must you implement touch-free payment systems?  Change your business practices as required to keep yourself, your employees, and your customers safe and avoid unnecessary expenses. 

2 | Don’t lose sight of deferred expenses for your small business

Have you deferred payments to vendors and lenders?  Don’t lose sight of the fact that you may owe a large sum of money in the future.  Deferring payment allows you to more time to pay your bills. However, it doesn’t eliminate your obligation to pay them.  

Make a list of all the expenses you’ve deferred and include them in your cash forecast.  Don’t be caught by surprise by large lump-sum payments.  

Furthermore, are you worried that you won’t be able to pay your expenses by the deferred due date? If so, contact vendors and lenders now to make alternative payment arrangements.  As a small business during this COVID-19 crisis, they may be willing to make further accommodations. They would much rather see you reopen your small business and make a late payment. It’s much better than no payment at all. 

3 | Understand the Payment Protection Program loan forgiveness requirements

Did you receive a Payment Protection Program (PPP) loan to help you maintain pre-pandemic staffing levels? If so read our latest blog on new requirements for PPP loan forgiveness now to get the steps needed to have your loan forgiven.

Here’s the quick scoop: PPP loans are fully forgivable (you don’t have to repay) if you use the funds for approved purposes.  At least 60% of PPP funds must be spent on payroll-related costs within 24 weeks of receiving the loan, and no more than 40% of the funds may be used for rent, mortgage interest, and utilities.  

First, read our PPP loan forgiveness post first.  Second, contact your lender. You’ll be asked to provide evidence of how you used the funds. Therefore, make sure you are tracking your expenses accordingly.  Not using a payroll system or running your small business without a CFO?  Drop us a line and let’s get you set up for success.

4 | Update your cash projections before reopening a small business

Your account balances may be sufficient now. However, when reopening a small business, your expenses will begin to go up again. What will your accounts look like in six weeks?  

If you are uncertain of how to predict this, create a cash forecast that lists all weekly inflows and outflows of cash.  Still not sure how to proceed?  Send us a message and we can provide consultation as if we were your personal CFO!

A cash projection provides crucial information about when you may experience a shortfall.  Knowing when cash will run low helps you act now to change your future financial circumstances.   


5 | Start prepping your small business to weather the storm

COVID-19 is not going away anytime soon. Furthermore, the coronavirus has put a spotlight on the financial weaknesses of small businesses.  Almost all of us have seen one or more of our clients press pause. Or, worse yet, our favorite small businesses close completely during the pandemic. Some yet to reopen. 

Why? Due to local and state regulations. In addition, because there wasn’t enough cash to continue operating.  

Therefore, here are a few key steps you can take now before reopening your small business. Ensure you are better prepared for reopening post-COVID-19, and for future financial emergencies.

Financial Steps to Reopening a Small Business:

  • Build a cash cushion equal to three or more months of expenses.  Treat savings as a monthly expense that you must “pay” to a separate savings account.
  • Apply for a line of credit to draw from during emergencies.
  • Consider alternate ways of generating revenue, including digital sales.
  • Cut non-essential expenses. 
  • Identify alternate vendors to supply goods and services if your primary vendors can’t deliver.
  • Develop business continuity and disaster recovery plans.  Need help developing a specific financial plan for your small business?  Contact us at 858.284.0314 or schedule your free financial consultation. 

Final Thoughts on Reopening A Small Business

This is a stressful time for most small business owners. We are all navigating uncharted waters. Therefore, don’t hesitate to ask for financial help.

With thoughtful planning and careful financial management, you can rest easier knowing that you are better prepared to weather the current COVID-19 economic crisis.  

, ,

Coping With the Coronavirus Cash Flow Crunch

If you’re like most small business owners, you are suffering from cash flow challenges due to the coronavirus pandemic.  With lots of money going out the door and much less coming in, what should you do to cope with the coronavirus cash flow crunch? 

In this article, we’ll discuss four critical steps to take to ensure your business survives this unprecedented time:

  1. Forecast cash flow
  2. Adapt your business practices to generate income
  3. Cut costs
  4. Apply for financial assistance programs

1 | Forecast Cash Flow

Cash deficits are the #1 reason businesses fail. COVID-19 is exacerbating the problem. How long will it take for your business to run out of cash if you have reduced or no income in the near future? You will surely feel stressed and anxious if you don’t have a good handle on how much money you need to sustain your operations. 

The solution is a cash flow forecast that predicts future inflows and outflows of cash.  By looking ahead, you’ll eliminate the much of the uncertainty about the cash you’ll have on hand next week or three months from now.  Not sure of how to set this up?  Reach out and we can help! 

Remember, do not manage cash simply by checking your bank account balance. A bank account balance is simply a snapshot in time that doesn’t provide insight into how much cash you’ll have in the future.   

Want to set up your own cash flow forecast? Great! Here’s how to create a basic cash flow forecast:

  • Start with your beginning bank account balance for the time period at hand, whether it’s the current week or month. 
  • List all your inflows of cash from sales, loans, or other sources. 
  • List all your outflows of cash such as payroll, rent, and credit card payments. 
  • Add your total cash inflows to and subtract your total cash outflows from your beginning bank balance. Then you will have a forecast of your ending account balance for the time period. 

Still feeling overwhelmed, don’t have a bookkeeper, let alone a CFO?  We offer services for both startups and small businesses. In addition, we already have experience helping businesses reopen and bringing them out of their cash flow crunch due to COVID-19. 

2 | Adapt Your Business Practices to Generate Income

Many states have ordered non-essential businesses to close. If your business was forced to close, and you are still suffering a loss of income, it’s time to get creative.  Brainstorm how you can continue to offer your products and services in a different way. For many, this many mean switching to e-commerce services or product sales. 

Do you typically meet clients in person? Determine if you can deliver your services online via video conference instead. Were you selling products at a storefront? Well, you might be able to promote digital gift cards or offer delivery services! 

Either way,  set up safe, socially-distanced options for your customers to continue to work with you. Stay top of mind. And, don’t overlook the power of social media to do this. Offer special promotions to keep clients engaged. 

Be sure to stay on top of your accounts receivable and follow up with customers who are late on payments. Bill customers as soon as you deliver your product or service. Consider using a factoring company (factor) to get an advance on the receivables your customers owe you before their payments are due to you. For more information on factors, see our article on cash flow. 

3 | Cut Costs to Increase Cash Flow

If you’re suffering from a severe cash-flow shortage, cost-cutting is essential. What should you do? First, reduce or eliminate all non-essential expenses.  Postpone major purchases. Sell excess inventory. Delay payments to vendors as much as possible. 

Rent and payroll are the two biggest operating expenses most businesses incur. Ask your landlord or mortgage lender if you can defer payments to a future date. Some lenders are offering rate reductions on existing debt. Payment deferments of up to six months are available on Small Business Administration 7(a) and 504 business loans and microloans.  Learn more about SBA loan deferments. 

Lastly, in this exceptionally low-interest rate environment, consider consolidating and refinancing any existing debt at a lower rate to save on interest expense. Contact your lender or finance professional for assistance. 

To learn more about how we’re helping businesses reopen post COVID-19, contact us at 858.284.0314 or schedule your free financial consultation.

4 | Apply for Financial Assistance

The Small Business Administration’s Economic Injury Disaster Loans (EIDLs) and the Paycheck Protection Program (PPP) forgivable loans are federal financial assistance programs available to small business owners. 

SBA Economic Injury Disaster Loans are available to businesses and non-profit organizations suffering losses from COVID-19. The funds from disaster loans can be used to pay your employees, vendors, and creditors.  Disaster loans provide up to $150,000 in assistance for business owners and have favorable terms including low-interest rates, and long payback periods.

The Paycheck Protection Program provides forgivable loans to small businesses to pay their employees during the pandemic. The loan amount is based on 2.5 times your average monthly payroll cost. The entire loan amount will be forgiven (you don’t have to repay it) if you use the proceeds to pay for payroll costs, rent, mortgage interest, and utility costs and you maintain staffing and compensation levels. 

Contact your local bank to find out if it is participating in the program.  Get all of the details about the Paycheck Protection Program.

In addition to exploring federal assistance programs,  research financial assistance programs that are specific to your industry and location. Special funds have been established for businesses in various industries. In some areas, local government agencies are also providing assistance. 

For example, the City of San Diego’s Small Business Relief Fund is available to local businesses affected by COVID-19. The fund provides grants and forgivable or low to zero interest rate loans to eligible small businesses. 

Final Thoughts on Increasing Your Cash Flow

This is a stressful time for most small business owners as we are all navigating uncharted waters. Don’t hesitate to drop us a message about how we might be able to work together to get you through this cash flow crunch.

, ,

The Paycheck Protection Program

Editor’s note: This article was last updated on June 9, 2020. It reflects loan forgiveness changes outlined in the Payment Protection Program Flexibility Act.

If you’re like many small business owners, you may be struggling to retain employees during the COVID-19 pandemic. Fortunately, federal financial assistance programs can help. In this article, we’ll discuss the Paycheck Protection Program (PPP). 

What is the Paycheck Protection Program?

The Paycheck Protection Program provides forgivable loans to small businesses. You may be wondering, how big of a loan can you get? Up to 2.5 times your average monthly payroll costs.

Ready for the great news? The entire loan amount will be forgiven if you meet the forgiveness criteria. Forgiveness means you don’t have to repay the loan.

Who can apply for the Paycheck Protection Program?

In general, small businesses with fewer than 500 employees, non profits, and veterans organizations. Sole proprietors, independent contractors, and self-employed individuals may also apply. 

In certain circumstances, businesses with more than 500 employees are eligible. Learn more about the SBA’s size standards for small businesses. 

Unlike other types of business loans, no collateral or personal guarantee is required for PPP loans. 

How must PPP funds be used? 

The primary goal of the Paycheck Protection Program is to help small business owners continue to pay their employees. 

Business owners must spend 60% of PPP funds they receive on payroll-related expenses. They must do so within 24 weeks after receiving the loan. No more than 40% of the funds can be spent on rent, mortgage interest, and utilities. 

Your loan won’t be fully forgiven if you don’t use all of your PPP funds on approved expenses. There are also restrictions on decreasing headcount or wages that may limit your ability to achieve 100% loan forgiveness. 

How do I apply for a Paycheck Protection Program loan?

Don’t delay in applying for a PPP loan. Loans are available on a first-come, first-served basis. The CARES Act initially allocated $350 billion to the Paycheck Protection Program. Later, lawmakers approved an additional $310 billion of funding.

Most lenders began accepting applications for Paycheck Protection Program loans in early April 2020. Which organizations can accept PPP applications? SBA lenders, federally insured depository institutions, and other regulated lenders approved by the Treasury. Find an approved lender here. 

First, see if you can apply with the financial institution you bank with. Some lenders will only take applications from their current customers. They may also require borrowers to meet other criteria. This may include having an existing lending relationship with them. 

If you don’t qualify, you can still apply with another lender that has different borrowing requirements. 

What if my PPP loan isn’t forgiven?

If you’re required to repay your loan, repayment starts 6 months after receiving the funds. 

Payments are deferred for 6 months. But, 1% annual interest will begin accruing immediately. Full repayment is due 5 years after receiving the loan. There is no pre-payment penalty for repaying it sooner. 

About Momentum CFO

Momentum CFO is a boutique firm specializing in outsourced Chief Financial Officer services for small to mid-size businesses. We bring the benefits of Fortune 500 financial expertise to your business without the expense of hiring a full-time CFO. 

To learn more, contact us at 858.284.0314 or schedule your free financial consultation.

, , ,

Economic Injury Disaster Loans (EIDL) for Small Businesses

As a small business owner experiencing a loss of revenue from the novel coronavirus (COVID-19) pandemic, you’re probably losing sleep at night wondering how your business will survive in these uncertain times. The mental narrative playing on repeat in your head may sound something like this:

“Coronavirus is crushing my business! How will I serve my customers? Am I going to lose even more of them? And my employees… will I have to lay them off? I’m not sure I can afford my next payroll. What about my bills and debt payments? I could lose my business! ” 

These concerns are enough to make anyone feel worried and anxious. Fortunately, disaster loans are available to help businesses weather the pandemic’s impact. 

What are Disaster Loans?

Note: the following information was sourced from the SBA’s website and was updated on July 21, 2o2o.

Disaster loans help businesses recover from physical and economic damages caused by a disaster such as a hurricane, flood, or in these times, COVID-19. 

The Small Business Administration (SBA) provides Economic Injury Disaster Loans (EIDL) to businesses and non-profit organizations suffering losses from COVID-19. These loans provide essential cash to help keep your business afloat. The funds from disaster loans can be used to pay your employees, vendors, and creditors. 

The SBA’s economic injury disaster loans provide emergency funding for business owners and have favorable terms including low interest rates and long payback periods. The interest rate for disaster loans is 3.75% for small businesses and 2.75% for private non-profit organizations. The length of the loan payback period will vary based on your ability to repay it, and can be as long as 30 years. 

Which Businesses are Eligible?

Small business owners in all U.S. states and territories are currently eligible to apply, provided that your business meets the SBA’s size standards. In general, to be considered a small business, you must not have more than 500 employees, but there are exceptions. Use the SBA’s Size Standards Tool to find out whether your business qualifies. 

SBA Disaster Loan Process

How to Apply for a Disaster Loan

You can apply for an SBA disaster loan online, by mail, in person at a disaster center, or by calling the SBA Customer Service Center at 1-800-659-2955.  The SBA recently introduced a streamlined application process.  Click here to access the application. 

Be sure to have your financial statements on hand before you apply. Among other things, you’ll be asked for information about your revenue and cost of goods sold, for the twelve months prior to the date of the disaster. The SBA defined January 31, 2020 as the disaster date. 

What Happens Next? 

After you submit your loan application, an SBA loan officer will review your credit, verify your eligibility, and approve or deny your loan application. If your application is approved, congratulations! It’s time to move on to the loan closing process and receive funding. 

You’ll receive an e-mail from the SBA that directs you to log into their website. There, you’ll have an opportunity to decide if you want to receive all or only some of the total loan amount that was approved.

What Else Should I Do?

Regardless of whether you’re approved for a disaster loan, there are other things you can do to mitigate the impact of COVID-19. 

  • Maintaining a cash forecast  that predicts your business’s future inflows and outflows of cash is vital to the health of your business.  By looking ahead, you’ll eliminate the much of the uncertainty and anxiety about what your business can afford in future. Check out our previous article for more tips on cash flow. 
  • You should also reduce or eliminate all non-essential expenses. If you’re running out of cash and have a line of credit, now is the time to draw funds from it. 
  • Consider seeking professional financial guidance to help you through this challenging time. While it may seem like one more expense you can’t afford, professional help may save your business from permanent closure. An experienced CFO will ensure that today’s problems don’t snowball into bigger ones down the road. If you need assistance coping with the financial fallout of COVID-19, engage a CFO today.  

About Momentum CFO

Momentum CFO is a boutique firm specializing in outsourced Chief Financial Officer services for small to mid-size businesses. We help business owners increase profit, improve cash flow, plan, and make smart financial decisions. Enjoy the benefits of Fortune 500 financial expertise without the expense of hiring a full-time CFO.

, ,

5 Financial Tips for a Prosperous New Year

Every year, millions of people make New Year’s resolutions, hoping to improve some aspect of their lives. As a small business owner, you probably have many ideas about how to improve your finances in 2021. But with so many opportunities, where should you begin? Start by reading up on these 5 financial tips for a prosperous 2021! 

1 | Set Measurable Financial Goals

2021 is the year to think big for your business. What do you want to achieve this year? Setting measurable financial goals is the first step toward ensuring your business is prosperous in 2021. 

The best goals are “S.M.A.R.T.” – specific, measurable, acheivable, realistic, and timely. Instead of setting a general goal such as “I’ll increase my profit in 2021”, try “I’ll increase my profit 10% by December 31, 2021”. 

2 | Create a Budget to Achieve Your Goals

The next financial tip for a prosperous new year is to think about how you’ll achieve the financial goals you just set. Whether you want to maximize profit, expand operations to a new location, pay down debt, or hire new employees, a budget is the key to your success.  

Think of it as GPS for your small business. A well-crafted budget charts the course to your desired destination and helps you navigate roadblocks you may encounter along the way. It provides the road map for achieving your goals and the yardstick for measuring whether your performance is on or off track. 

When you compare your monthly financial results to your budget, you can spot warning signs of a potential problem. Then, you can take corrective action to avoid unfavorable results. And, if you find that you’re achieving or exceeding your goals, you’ll have a reason to celebrate! 

Still not convinced?  Learn why budget planning is so important for the success of your small business.

3 | Stay on Top of Your Numbers

It’s critically important for business owners to review and understand their financial results.  Timely, accurate, and meaningful financial reporting and analysis provides the information you need to successfully manage your business finances. 

Was there a profit or loss last month? Why? What needs to change to ensure you achieve your profitability goals?  Having insight into your numbers reveals opportunities to understand and improve your small business finances.

4 | Have a Backup Source of Cash

Ongoing cash deficits are the #1 reason small businesses fail. And aside from the obvious jeopardy your business will be in without steady cash flow, you’ll surely feel stressed and anxious about the future. 

How do you avoid that risk and discomfort?  Savvy business owners plan for seasonal cash shortages.  How? Here are a few ways:

  • Build cash reserves (an “emergency fund”)
  • Obtain a working capital line of credit
  • Monitor your accounts receivable. Ensure your customers are paying you on time. Immediately follow up with those who have past due bills. 
  • Maintain a cash forecast that predicts your future bank account balance. Today’s balance doesn’t give you visibility into your cash balance at the end of this month, next month, or six months from now. 

Need more tips? Check out this article on common cash flow mistakes and how to avoid them.

5 | Know When to Ask for Help

It takes tenacity and perseverance to build a business. But as your business grows, so do the financial responsibilities, decisions, and demands for your time. It’s okay to ask for help. 

As an educated and intelligent business owner, you might feel overwhelmed or embarrassed about your never-ending financial to-do list or challenges. Believing that you “should” be able to manage your business finances on your own won’t change the situation. Going it alone could result in compounding problems. Outsourcing to an expert makes the best use of your time and yields better, faster results.

If you’re struggling to keep up with your small business finances, set up a free introductory meeting to learn how Momentum CFO can help. 

The Bottom Line

A new year brings new opportunities for greater small business success. These five simple financial tips are the foundation for a great 2021. 

Have a happy, healthy, and prosperous new year!

About Momentum CFO

Momentum CFO is a boutique firm specializing in outsourced Chief Financial Officer services for small to mid-size businesses. We bring the benefits of Fortune 500 financial expertise to your business without the expense of hiring a full-time CFO. 

To learn more, contact us at 858.284.0314 or schedule your free financial consultation.

, , ,

6 Cash Flow Mistakes to Avoid

“Entrepreneurs believe that profit is what matters most… But profit is secondary. Cash flow matters most.”  – Peter Drucker

Cash is truly the lifeblood of your business.  Without it, there’s no money to hire employees, buy supplies, or repay debt.  According to a US Bank study, 82% of businesses that fail do so because of cash flow problems.  Don’t be a statistic- learn six cash flow mistakes that can sink your business, and how to avoid them.

1 | Overestimating Sales 

If you have a financial plan for your business that projects your income, expenses, and expected profit, great job! You’re on the right track.  However, if your sales projections are overly optimistic, you may find yourself short on cash.  If you’re counting on every one of those sales to materialize in order to afford your business expenses, take a step back.  Most businesses don’t generate significant sales in their first few months (or sometimes years) of operation.  

While it’s great to have a “best case scenario” financial plan for your business, it’s also important to have a more conservative backup plan.  Identify expenses that you can reduce, postpone, or eliminate if sales aren’t as strong as you expected, and immediately cut costs when needed. 

2 | Overdue Customer Invoices

You’ve made the sale and sent the invoice… now you need your customers to pay you on time so you can pay your own business expenses. 

To avoid coming up short, review your accounts receivable (A/R) aging report each month and contact customers that have overdue invoices.  Include consequences such as late payment fees in all your customer contracts, such as 3% of the invoiced amount for each month that the invoice remains unpaid.  Set clear collections policies for unpaid invoices and be diligent about following up. 

3 | Out of Sync Payment Terms

If the payment terms you offer your customers are significantly different than those you have with your vendors, you’ll quickly wind up with a cash flow deficit.  For example, if you give your customers 45 days to pay your invoices but your vendors require you to pay in 15 days, you’ll need extra cash on hand to cover the 30-day gap in payment terms.  

To close the gap, renegotiate your contracts with customers and vendors.  If that’s not possible, consider offering your customers a small early payment discount, typically 1 – 3%, to give them an incentive to pay invoices before they’re due.  

If out of sync payment terms are a consistent problem, invoice factoring may be a solution.  Factoring companies advance qualified businesses short-term cash secured by the value of customer invoices.  Here’s how it works: You send your customer an invoice for $25,000 that’s due in 60 days. The factoring company advances you $25,000 immediately, and then collects payment from your customer when it’s due.  As with any type of financing, be sure you fully understand the costs of the factoring arrangement.  Factoring companies generally offer their services in exchange for a percentage of the invoice value.

4 | Not Having a Cash Flow Forecast

When you first started your business, managing cash flow may have seemed as simple as ensuring you had enough money in your bank account to cover your expenses.  But a bank account balance is simply a snapshot in time that doesn’t provide insight into how much cash you’ll have in the future.  

The solution is a cash flow forecast that predicts future inflows and outflows of cash.  By looking ahead, you’ll eliminate the much of the uncertainty about the cash you’ll have on hand next month or six months from now.  You’ll be able to pinpoint times when you expect a cash flow deficit and create a plan to ensure it doesn’t put your business in jeopardy.  

5 | Not Having a Backup Plan

Cash crunches are sometimes inevitable.  It’s impossible to predict the future with perfect accuracy, so it’s crucial to have a cash cushion or “emergency fund” to fall back on when you have a cash deficit.  Your emergency fund should include enough cash to fund at least 3 months’ worth of operating expenses.  Keep the funds in an account that isn’t at risk of losing value, such as a savings account.  

You can also consider applying for a line of credit that you can draw from when your cash flow forecast indicates that there will be a deficit.  Interest rates for lines of credit are variable, so stay on top of your borrowing costs by reviewing your monthly statements.  

6 | Not Knowing Your Numbers

Last but not least, you must know your numbers to have positive cash flow and a profitable business. It’s tempting to put managing your finances on the back burner while you focus on generating the revenue needed to sustain your business. But without a solid understanding of your monthly financial performance, it’s difficult to pinpoint problems and determine how to adjust course when things don’t go as planned. 

Each month, review your cash flow statement, which reflects your inflows and outflows of cash, and your P&L, which details your income, expenses, and resulting profit or loss.  Those two reports will give you an understanding of your sources and uses of cash. 

Final Thoughts

Maintaining healthy cash flow is a common challenge for entrepreneurs.  If you stay on top of your finances and regularly update your cash flow forecast, you’ll set yourself up for future success.  If you have a cash flow problem and aren’t sure what to do next, make it a priority to engage a qualified financial professional.  When you have little cash to begin with, it may seem counterproductive to spend more of it.  But just as a doctor helps you get well when you’re sick, an experienced CFO can help your business return to financial health.  Engage a CFO today.  Your bank account will thank you! 

About Momentum CFO

Momentum CFO is a boutique firm specializing in outsourced Chief Financial Officer services for small to mid-size businesses. We bring the benefits of Fortune 500 financial expertise to your business without the expense of hiring a full-time CFO. 

To learn more, contact us at 858.284.0314 or schedule your free financial consultation.

, , ,

Small Business Financial Management Checklist

Do you need a financial management checklist for your small business? Well, you’re in luck! You’re in good company if you’re unsure about what you should be doing to keep your business finances in order. Many small business owners benefit from guidance on how to manage their finances. Here’s a handy checklist to keep you on track. Contact us if you need help completing these tasks. 

Daily Checklist

  • Check account balances
  • Record all financial transactions in accounting software
  • Document and file expenses receipts
  • Log business mileage

Weekly Checklist

  • Deposit checks and cash
  • Invoice customers
  • Pay vendors
  • Process payroll (bi-weekly)

Monthly Checklist

  • Reconcile bank and credit card accounts
  • Review past due receivables
  • Prepare monthly financial reports including a profit and loss (P&L) statement, balance sheet, and cash flow statement
  • Analyze financial results. Compare results to the prior month and your budget.
  • Review key performance indicators that measure the health of your business
  • Assess progress made toward achieving your financial goals
  • Update profit & loss forecast and cash flow projections
  • Review inventory
  • Look for personal expenses paid from business accounts or vice versa
  • Close the books

Quarterly Checklist

  • Pay estimated state and federal taxes to avoid late payment penalties
  • Submit payroll tax reports and make payments
  • Make sales tax payments, if applicable
  • Review quarterly financial statements
  • Prepare customer, product and service, and/or project profit and loss analyses
  • Complete a physical inventory count
  • Analyze return on investment (ROI) of major initiatives 

Annual Checklist

  • Close out your bookkeeping
  • Prepare financial reports and tax returns
  • Audit financial statements and internal controls
  • Complete IRS W-2 and 1099 forms
  • Review unsold and obsolete inventory 
  • Evaluate contacts and negotiate more favorable terms
  • Set goals and develop a financial plan for the upcoming year

The Bottom Line

This financial management checklist will help you stay on top of your business finances. Get a copy here:Financial Management Checklist DownloadDownload

About Momentum CFO

Momentum CFO is a boutique firm specializing in outsourced Chief Financial Officer services for small to mid-size businesses. We bring the benefits of Fortune 500 financial expertise to your business without the expense of hiring a full-time CFO. 

To learn more, contact us at 858.284.0314 or schedule your free financial consultation.