Although the recent Orange County weather may have you wondering, the street traffic in Irvine confirms it; Autumn has arrived and we are fast approaching the last quarter of the year. There are 3 things you should be doing in your business now to ensure a smooth transition into 2011. 
Number one- Plan for next year. While I do not suggest a detailed budget for most smaller business, you need a plan. Now is the time to take stock of 2010 and figure out where the business is going in 2011. Consider what is working and what isn’t, what new developments will impact future operations and create a one or two paragraph statement of what you are going to do and how you will do it. Translate these ideas into a simple financial budget to track progress. At a minimum the budget should include:
• A sales goal or target with the tactical steps needed to reach that goal.  If the sales activity is expected to be evenly distributed throughout the year, an annual goal is fine. But if you know there is significant seasonality, its important to establish monthly goals so you will be able to evaluate if things are on track;
• A gross profit percentage goal. Usually you can use the gross percentage the business is generating this year, just make sure you have thought through how any changes in vendors, products, customer mix and markets will impact the cost of what you sell; and
• A net income goal as a dollar amount or percentage of sales.

Number 2- Talk to your tax preparer BEFORE year end. This is a prudent idea in any case, but it’s critical if there is anything new in the current year opearations or planned for next year’s operations.  There are typically more or less tax advantaged ways to handle most transactions. If you let the tax preparer know what’s up before year end, there may be tax saving options. If the tax preparer doesn’t know before year end,  there’s usually nothing that can be done; you could be leaving money on the table.

Number 3- Clean up Vendor and Employee records Not as strategic as the other two, but you don’t want to spend the first month of next year trying to get the 1099′s and W-2′s completed.  Here’s what you need to do:

• For employees- make sure you have social security numbers and complete addresses on file for anyone who worked for you during the year (even, actually especially, those that don’t work for you now).
• For Vendors- Run a listing of the 1099 vendors and make sure you have social security numbers or tax identification numbers and addresses for all 1099 vendors.  Second, review the complete vendor listing to look for possible 1099 vendors that have not been identified as 1099 vendors. For example 1099 requlations require reporting for individuals, law firms and landlords.