It can be difficult to find the right balance between managing the holiday rush and prepping for the new year. However, you’ve got a long list of things to accomplish before January 1. These include compliance to-dos, financial statements, hiring needs, and more.
Devote some time to your end-of-year business checklist to not only finish off on a high note but also set yourself up for success in 2022.
1. Review upcoming labor laws
The start of the year comes packed with new employment legislation for many states. Minimum wage increases, paid leave changes, and other labor laws could be coming to your state. Take some time to review our articles on what’s coming in 2022:
- Federal labor law changes
- COVID vaccine mandates by state
- Non-compete law changes by state
- State minimum wage rate increases
- State paid leave law changes
2. Update employee handbooks
After reviewing upcoming labor law changes in your state, make sure your employee handbook reflects those new rules. If you introduced any new policies in 2021(like benefits, wages, and more), add them to your handbook.
If you need help reviewing your policies, Homebase HR Pro can help. You’ll have live access to certified HR experts who can take a look at your existing handbook or even help you build one from scratch.
3. Double check FLSA compliance
The US Department of Labor is working to pursue any FLSA violations that occurred during the COVID pandemic due to staff changes. During the pandemic, your employees may have transitioned to remote work. Maybe you hired contractors, changed job duties, or made other decisions around wages and work arrangements.
Regardless of how you adapted in response to the pandemic, now is a good time to review your wage and hour practices in case you get audited.
4. Run year-end financial reports
Take a look at the big picture by running an end-of-year financial report. Your report should include:
Your profit and loss statement will help you understand where exactly your business stands financially today and what your outlook is for 2022. If your profits aren’t where you want them to be, you have the opportunity to make some modifications. If they’re higher, now is the time to use them to boost your business.
After running your cash flow report, it’s time to analyze it. Your cash flow statement reports on how you spent money during the year. Inflow is how much money came in, and outflow equals your expenses. Obviously, the goal is to have a larger inflow than outflow. Take a look at your cash flow to see what your trends were for 2021.
5. Audit payroll information
Perform an audit of the payroll information you have on every employee. Are all phone numbers, addresses, and other necessary information accurate? You can also use this audit to update employee statuses that may have changed.
Did you add any new benefits? Make those updates before the new year and ensure all fringe benefits like company vehicles, sick pay, and healthcare benefits are reported.
6. Check inventory
Conduct an inventory audit as close to the end of the year as possible. If you find any significant issues between your actual inventory and what you have recorded, now is a good time to look into why so you can avoid any internal loss.
Clearly document all your inventory procedures, and if you’re still handling them manually, consider transitioning to an accounting or POS system to automate the process and prevent unnecessary mistakes.
7. Assess hiring needs
Take an inventory of your current staff and figure out whether or not you want to hire more employees based on your goals for 2022. Lining up your needs now will give you time to budget for those extra labor costs.
This is also a good time to review your compensation package and ensure it’s still competitive in today’s market. Take a look at our recent survey results to learn more about what employees are looking for in order to attract top talent for your business.
Inversely, you may be overstaffed due to changing business needs. Think about reallocating your team to different roles, reducing hours, or rearranging schedules so you’re not overspending in the labor department.
8. Check vendor information
Just as your business changes throughout the year, your vendors have likely made some updates. Verify that the following are still correct for each of them:
- Phone number
- Email address
- Contact name
Clean out any inactive vendors or incorrect information. While going through your list, you can also evaluate each vendor relationship and identify any negotiation opportunities for better deals in 2022.
9. Resolve accounts receivable
Take a look at your running list of unpaid invoices and clients that owe money for completed work. Is the list longer than you’d like? Start the year off with as few outstanding invoices as possible by collecting past-due payments. This will boost cash flow and start you off on the right foot.
10. Gather tax documents
Now is a great time to get your tax documents together. Your previously completed financial reports will help you complete your small business return, but you’ll also need to fill out the following forms:
- 1099-NEC
- 1096
- W-2
- W3
- State and federal payroll returns annually (Form 940) or quarterly (941)
Additionally, gather your business and personal income as well as all your deductions. You can learn more in our article about small business payroll tax forms. Need more payroll help? Check out our end-of-year payroll checklist.
11. Review and set goals
If you laid out a set of goals for 2021, revisit them and determine what was accomplished and where you still have room to grow. Ask yourself the following questions:
- Did you achieve your goals? Why or why not?
- Were any goals exceeded? Why and how?
- What are your next steps after achieving the goals?
- How did any missed goals fall short?
- How can you work to achieve those goals next year?
After reviewing your previous goals, you’ll have a clearer picture of what you need to accomplish in 2022. Capitalize on this momentum by documenting your new goals. Maybe you need to increase sales by a certain percentage, or maybe you need to upgrade your training program to prevent employee turnover.
Whatever your new goals may be, develop a plan of action for each one — and be SMART:
- Specific
- Measurable
- Attainable
- Realistic
- Time-based
Break each goal into bite-sized pieces you can achieve on a daily basis. Identify measurable key metrics you can regularly assess. Think about what you and your team can actually achieve and how long it will take to make things happen.
12. Thank your employees — and yourself
Your team is likely working the hardest at this time of year and could use a little morale boost. Take some time to reward them, whether it’s with a holiday party, an upgraded PTO plan, or even flexible hours so they can get their gift shopping in. Doing so will increase your full-time employees’ loyalty to your business and keep your seasonal team coming back.
Don’t forget to boost your own morale amidst the madness. You’ve worked hard this year — you deserve a vacation! Look at the 2022 calendar and find some available downtime you can use to hit the road and practice a little self-care in the new year.
13. Reassess your team management software
Was your team management app as great as possible this year? Does it have all the tools you need, like communication, payroll, scheduling, time tracking, and compliance? If not, the beginning of the year is the perfect time to switch — and we recommend Homebase.
Homebase helps you optimize your schedule, adapt on the fly, and ensure your team is in sync, all in one easy-to-use app. You can send helpful alerts to employees instantly through our communication tool and even fully automate your payroll process.
Start the new year on the right foot by switching to Homebase and making work easier for everyone involved.
Remember: This is not legal advice. If you have questions about your particular situation, please consult a lawyer, CPA, or other appropriate professional advisor or agency.
