Accounting Tips to Survive the Holiday Season

Accounting, budgeting, and spending don’t usually mesh well with holiday shopping. But fall is officially upon us! Even though here in Arizona it may not feel like it thanks to the high temps. As the season changes, it is time to come up with a plan regarding your finances and the holidays to avoid any emotional or financial stress. More than half of Americans feel stress during the holidays due to financial struggles. Following some simple tips can bring you the joy and financial freedom you’ve been searching for. 

Tips for Individuals:

  1. Set a Budget: Before you start holiday shopping, map out a budget plan to limit your spending. Consider how fast money adds up when shopping for spouses, parents, kids, siblings, or coworkers (just to name a few)! To avoid being sticker shocked when your credit card bill comes and possibly putting you in debt, set a budget and stick to it. Some easy ways to budget can be:
    • Make a list of everyone you wish to shop for and how much you are comfortable spending on that individual. As you shop, mark your list as complete with the amount you actually spent. By doing this, if you went a little over or a little under on the budget you can see that impact.
    • In addition to present shopping, you may have additional expenses to consider such as airfare for travel or going to a fancy dinner with relatives or friends. Add this into your total budget you feel comfortable spending for the season. 
      • A variety of free budget worksheets can be found online that can map out every potential expense you may encounter while helping you keep track of your current spending.
    • If you are concerned you may not be able to stick to your budget, consider having a second checking or savings account strictly for your holiday expense money. Only use the funds in this account to make any purchases for holiday gifts for essentials.
  1. Start Early: Once you know how much you feel comfortable spending, you can get to the fun part and start shopping! Starting early gives you time to break the spending up and spread it out over a longer period of time. This will also give you time to look or wait for sales such as on Black Friday. 
    • Consider your shopping to begin in early October or November. This provides you many pay periods to use a portion towards holiday expenses before the big days arrive. 
    • As mentioned above, you can set money aside in a separate account. Even before October, you can consider contributing to that account. Perhaps contributing small amounts throughout the course of an entire year will ease the financial burden. Many employers allow you to split your direct deposit and customize the amount you wish to set aside. You may be surprised to find that you aren’t missing the small deduction from your paycheck too much and by the end of the year you have quite a large chunk of change set aside. 
  1. Price Shop: Just because you have a budget of say $100 for an individual doesn’t mean you should buy the first product you see without price shopping. You may be surprised that buying the item direct to consumer saves you money rather than buying it from a big box store. Do your research and look at a variety of retailers prior to purchasing. 
    • If you have gifts in mind, consider shopping around or waiting a week or so before purchasing just to allow the item to potentially go on sale. 
      • Waiting until Black Friday for a huge deal is gamble. For example, what if the item never goes on sale? What if the item is sold out before you can purchase it? However, it can be also be a big gamble that pays off in huge savings! How you conduct your shopping and sales it completely up to you.
    • Some retailers price match their competitors. Always ask a sales representative when you are shopping if they offer this service. It’s also a good idea to check the online price of a retailer before buying it in store as sometimes the prices will be a little lower on their website. 

Tips for  Small Business Owners: 

  1. Stay Ahead: For small business owners, the holidays may add a little bit of extra stress and chaos to your already busy season. Being prepared and staying ahead are the best things you can do for yourself and business in the long run. Avoid delaying any business related tasks because before you know it, you can easily fall behind. Keep up on all of your usual business practices, bookkeeping processes, and invoices. 
    1. This is probably going to be your busiest quarter of the year, so documenting everything and staying organized will help you with your year end reporting and taxes. Avoid waiting for the quarter to be over to begin. Try to dedicate specific time to stay up on your businesses finances and make a habit of this either daily, weekly, or bi-weekly. Anything longer than that can add potential for error or stress this time of year.
  1. Be Prepared for Business to Boom: Customers are ready to spend money this time of year so be prepared for an influx! Depending on your business type, be aware of how it will be impacted as the holidays approach. For example if you are a local craft store, customers may want their holiday craft supplies or holiday decor for all of the major holidays between October and New Years. If you have a restaurant, be prepared to have more wait staff for all nights of the week to handle company parties, family dinners, etc. 
    • Ensuring you are stocked up on all inventory and possibly cash for the register drawers or safe will help your business run smooth and make the most money. 
    • As a small business owner, you can add to the booming business by considering offering holiday sales. You can advertise your business locally  and offer both physical or digital coupons which can bring in more business than usual and introduce new customers to your company.
  1. Consider Employee Bonuses: Some companies offer a holiday bonus. This is a great gesture to keep your staff happy and reward them for their hard work. However, this must be something you consider and determine your are financially able to do for your staff. 
    • Setting up a pre-holiday meeting with your accountant can be a good time to discuss a strategy and possible bonuses. They can give you the financial guidance on making this decision. 
    • Depending on the entity of your business, offering employee bonuses can be considered a tax write-off. Schedule a consultation with the My Accountant Bookkeeping & Tax Service Inc now to determine if an employee bonus should be in your businesses plan and if you can use this towards your taxes. 
  1. Get Extra Help if Needed: Staying on top of the day to day of the business and the finances will help you survive the holiday season. However, this is often a time of year you may need extra help. If you need help in an area—get it! It is not worth losing any business or money you could have made.
    • If you didn’t use a bookkeeper or accountant prior, considering working with one during the holiday season. They can help you with your expenses and ensure you stay on track financially. Working with an accountant now can also help when filing your taxes later as they will already have an understanding of your business and its financials.
    • Consider hiring temporary or seasonal workers. Because many businesses have a boom this time of year, considering hiring around the months of October through January or February of next year. Offering temporary jobs let employees know up front this is a short-term position until business eases once again.

It probably snuck up on you, but the holidays are pretty much here, and will be for the next few months. As individuals or business owners, it is never too early to get prepared, make a financial plan, and stick to it! If you find yourself falling behind financially or needing financial guidance, reach out the My Accountant Bookkeeping & Tax Service Inc team. They can help bring the joy back to your holiday season. 

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