A great way to start the new year is to get clear on exactly how you can make your revenue goal number. A revenue plan is the perfect tool. You’ll need to be proficient in Excel, and if not, you can work with your accountant on this very important and enlightening spreadsheet.

Start by listing all of your products and services, listing one product or service in each row of a blank spreadsheet.  Enter the description in the first column and use the second column for price. You may be able to export an item list from your accounting system, which will save a lot of time if you have a lot of products and services that you sell.

Use column three to enter the number of items you want to sell for the year. Column four should contain formulas to multiply the price by the volume to get revenue for each service and product you sell.

You can then sum the numbers in column four to generate your projected revenue for the year.

Getting Industry-Specific

Depending on what industry you’re in, you may need to make some adjustments to the above simplified revenue plan. If you work in construction, you’ll need to list your projects instead of products and services, and you’ll need to make adjustments if your project will go longer than one year. You’ll need to add a couple of extra column to determine the percentage of the project that will be complete and billable in 2015.

If you bill by the hour, you’ll need to calculate how many hours of service you’ll be able to charge for and factor that into the equation.

If you have sales, you’ll need to figure a discounted price. I recommend you have an extra line for each product that sells at a discount and allocate the total amount you plan to sell at each price. If that’s too much work, you can calculate an overall discount rate and apply it to total revenue at the bottom of the worksheet.

Use the 80-20 Rule

If you sell a lot of products and services, consider bundling them into subgroups to keep your plan cleaner and at a higher level. Spend only the amount of time that’s worth the insights you’ll gain from doing an exercise like this.

A Prosperous New Year

Once you’ve created the plan, you can now take action based on insights you’ve gained. Perhaps you’ve got a whole new set of revenue resolutions to accomplish in 2015. If you need help constructing or analyzing this plan, feel free to reach out to us and let us know how we can help.

In a little over a month, it will be 2015 and time for year-end accounting chores.   One of those chores is getting your 1099s out, and now is a good time to tie up loose ends so the year-end process can go smoother.  Here are some tips to do just that:

1. Go through your vendor list and make sure each contractor that you are paying is marked in your accounting system as a contractor eligible for a 1099.
2. Obtain a W-9 form from each contractor if you haven’t already, and update the address and federal EIN for each contractor.  This will ensure that you have the most current information for each contractor and that they will receive their 1099 promptly.
   
   If you need to make any changes in the way you are paying them or withholding taxes, you’ll have a chance to update that information as well.
3. Ask your contractors for a worker’s compensation certificate.  If you don’t have one, you might need to add their payment totals to your payroll amounts on your worker’s compensation audit worksheet.
4. If your accounting system doesn’t break out payment type, you’ll need to do that on a separate spreadsheet before you input the 1099 amounts.  Contractors paid with a check will require 1099s.  Contractors paid via PayPal or credit card will not.   If you have paid them both ways, you will need to break it out.  You can do the bulk of the work now and post the remainder of the year after year-end.
5. Consider re-evaluating each contractor as to whether they meet the employee versus contractor tests from the IRS.  If you are accidentally misclassifying a contractor who the IRS defines as an employee, you will be responsible for social security, withholding, and other payroll taxes, which can add up to huge numbers for small businesses.
   
   This is a “red flag” area for the IRS, meaning they are looking to “bust” employers.  However, they also have a Voluntary Classification Settlement Program for people who have been misclassifying workers in the past and want to come clean.

Following these five steps will put you in great shape for year-end.  And if you need help catching up with your contractors or with any related issues, please let us know.