Over the past month or so, I’ve posted several articles talking about some of the end-of-year tasks for practices — finalize your budget, finalize your holiday closing schedule for 2008, meet with your accountant and financial advisor, and prepare your business/operational plan for 2008. With three business days remaining in the year, here are a few of the very last-minute items you need to complete:
1. Spend: If you are on a cash basis, paying bills raises deductible expenses for 2007 and lowers the final tax bill. However, if you expect revenue and profit to be significantly higher in 2008, you may want to postpone payments until January. This, dear friends, is a topic for that year-end planning meeting with your accountant that I talked about.
2. Pre-pay expenses (rent, subscriptions): Again, this helps raise your deductible expenses.
3. Distribute profits (as needed): This is a real tax-related question. If you have not spoken with your tax advisor yet, pick up the phone RIGHT
4. Plan cash reserve to start the year: When making distributions, do not leave the practice without enough cash to operate. Payroll has to be made, and there is no sense in having to borrow money, even for a short period of time, to do so.
5. Retirement contributions: Depending on the plan, you may have some time to make the 2007 contribution. This, too, is an accountant/financial advisor question.
Finish up the day, and enjoy the weekend. My best wishes to all for a Happy New Year!