As the holiday season got underway last week with Thanksgiving, you might not have been thinking about budgets and business taxes. But the following year-end planning tips for businesses and marketing departments can help you make the most of your year-end financial situation.
1. Get a Marketing Budget Update from Accounting: As part of your year-end strategy, you should have a good idea of your company’s financial picture and how that relates to your marketing effort. Now is a good time to sit down with the CFO for year-end advice, particularly regarding any remaining monies allocated for marketing activities that will expire at the end of the year.
2. Pay Expenses Now: Pay for things your business or marketing department will need in the near future to possibly maximize the deductions for this year. If you can justify the need for new equipment or other items in the first quarter of next year, buy them now. Some possibilities include:
• Trade Show Displays and Equipment: If you will be purchasing a new trade show display, consider doing that now. Check with your accounting department to make sure that doing this now will reduce your tax burden and fits with your company structure and circumstances. Your new trade show display may have to be officially received or even physically be at your facility by the end of the year, so build that into your timeline. The sooner you get the ball rolling, the more likely your exhibit agency will be able to design, produce and deliver your new trade show display in time.
• Literature & Giveaways: Stock up on trade show related collateral such as brochures and giveaway items.
• Recurring Billing: If you can, try to pay recurring bills such as trade show display storage fees, software license agreements, publication subscriptions, and organization memberships in advance before the end of the year.
• Other Items: Try to pre-pay travel expenses, repairs to equipment, or maintenance costs that you know will occur early in the new year.
3. Postpone Income if Necessary: Coordinate with your sales department to delay the collection of payments until the first part of January instead of the end of December if this reduces your tax bill. Cash that remains on the books at the end of the year may be taxable for that year. Keep in mind that different strategies apply to your particular situation (profit/loss position, company structure, etc.), but it could make sense to get the cash on hand as close to zero as possible at the end of the year.
4. Check Inventory: If you have product that was used at a trade show and is now considered “refurbished” inventory or has otherwise experienced a drop in value, be sure to find out if your accounting methods allow deductions for this. And consider offering remaining inventory at special terms during any December trade shows or special events to further reduce your inventory tax obligation.
As mentioned above, the strategy for applying these tips will depend on the individual business circumstances and accounting methods. Be sure to review your company’s strategy with your accounting department, CFO, or professional tax accounting professional. But if you plan carefully, any taxes you save can be put towards face-to-face marketing initiatives for next year.
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