It’s a new year—cue the confetti—and many of us are making resolutions and setting intentions to make 2025 a year of learning, growth, and improvement.
Of course, we also know that the same resolutions we set eagerly at the beginning of the year usually peter out by February. Why? Many reasons—sometimes, we set unrealistic goals, or we don’t hold ourselves accountable. More often than not, though, the reason for resolutions daily is because we jump into big changes without a strategy—and we get discouraged.
Instead of traditional resolutions, we’re focusing on solutions—especially when it comes to the moves that can transform your business’s financial health. With that, here are six strategies that we’re making sure our clients are taking in 2025 to make sure they’re starting the year off on the right note.
#1: Mapping Accounts Correctly
Have you ever taken a road trip with an outdated GPS? That’s exactly what you’re doing if your chart of accounts isn’t aligned to your business. Making sure all your accounts are mapped correctly isn’t just about organization—it’s about creating a foundation for the financial insights you need.
Here are a few action steps we suggest:
- Review your current chart of accounts: Take time to examine each account’s purpose and usage. Are there accounts you haven’t used in the past year? Do some accounts overlap in function? What do you need to add?
- Make sure your account categories properly reflect your business structure: Your accounts should mirror how your business actually operates. If you have multiple revenue streams, for example, each should have its own income account for clear tracking.
- Consolidate duplicates: Look for accounts that serve similar purposes (such as multiple “Miscellaneous Expense” accounts) and combine them if you’re able to reduce future confusion.
- Create clear naming conventions. Having a standardized naming system makes accounts easy to find. If you have those multiple revenue accounts we talked about above, for instance, they could all start with “REV-” followed by the specific category.
#2: Optimize the Set-Up of Your Products & Services
Your product and services structure needs to tell a clear story about your business performance. We’ve seen many businesses discover that they’re actually missing insights on their profitability—simply because their setup doesn’t match their actual business operations.
Here’s how to tackle that:
- Are your products/services categorized logically? Group similar offerings together and ensure your categories make sense for your business model. A software company might separate subscription tiers from one-time implementation fees, while a retail store might group products by department.
- Can you easily track the profitability of each offering? Your setup should allow you to quickly determine not just revenue, but true profitability by accounting for direct costs, overhead allocation, and resource utilization for each product or service.
- Does your structure allow for meaningful comparison across categories? You should be able to easily compare performance metrics (margins, growth rates, customer acquisition costs) between different product lines or service categories to inform strategic decisions (i.e. will you continue to offer those services, will you bundle them, etc.).
- Is it easy to analyze trends within product or service lines? Whether those trends are seasonal sales patterns, growth trajectories, or changing cost structures, you want to make it as simple as possible to understand those trends at a glance.
#3: Implement Better Department & Product Tracking
We’ve all heard the adage “What you can’t measure, you can’t manage.” Make this year the year that you gain those granular insights into your business performance by implementing department and product line tracking to inform how you make better decisions:
Here’s why this specific action matters:
- Getting clear visibility into the profitability for each department: Track direct costs, overhead allocation, and revenue generation for each department to understand which areas drive the most value for your business.
- Better resource allocation: Use departmental performance data to make informed decisions about where to invest in additional staff or hours, technology, or other resources based on proven returns.
- More informed pricing decisions: Understand the true cost of delivering each product or service, including departmental overhead, allowing you to set prices that ensure profitability while remaining competitive. (If you need help with this, Cassmer’s book, “How Much Does it Cost to Make a Donut,” has a great real-life example on how to do this!”
- Enhanced budget planning: Create more accurate budgets based on historical departmental data and projected growth, rather than making broad assumptions across the entire business (because assumptions when it comes to finances don’t really feel great, right?).
#4: Close Out Your Year Strategically
The way you end 2024 sets the stage for 2025—and as much as we want to wrap it up and get on to the next year, it’s a great opportunity to implement new practices and tracking methods that will help you create even more order for your finances over the next 12 months.
Here’s a checklist that might help:
- Reconcile all accounts thoroughly: Go beyond basic reconciliation by investigating any discrepancies, clearing out old accruals, and ensuring all transactions are properly categorized before closing the year.
- Document any changes in accounting practices: Create clear records of any modifications to your accounting methods, new accounts created, or changes in how you track certain transactions. (This is especially helpful when it comes to year-over-year comparisons!)
- Set up new tracking systems for the coming year: Implement any new financial tracking methods before the new year begins. This might include new project codes, department identifiers, or service categories.
- Review and adjust KPIs as needed: Evaluate which metrics served you well this year and which need adjustment. Decide: Which metrics do you no longer need, and which new KPIs will align with your 2025 strategic goals?
#5: Establish Monthly Reporting Protocols
When you’re in the thick of your business, it can be tempting to quickly reconcile your expenses and revenue and move on to the next month. However, creating a monthly reporting protocol can give you the insights you need (and help you stop wondering about the financial health of your business.)
Here are a few essential monthly reports we’d suggest:
- Profit and loss statements by product or service line: P&L’s for specific business units or offerings can help you understand where you’re making (or losing) money, and be proactive about making changes, too.
- Cash flow projections: Cash flow is one of the best indicators of a healthy business. We suggest a rolling quarterly cash flow forecast that accounts for any business seasonality, payment terms, and anticipated large expenses or investments.
- Budget vs. actual comparisons: Detailed variance analyses like this one not only shows differences, but also helps explain why actuals deviated from your budget and what adjustments might be needed.
- Key performance indicators (KPIs): These will be different based on your own personal KPIs, but having all of your KPIs in the same place can help you understand your data holistically—and help you determine if the KPIs you’re tracking are actually useful.
#6: Evaluate Your Financial Support Needs
Your business is not the same business it was at the beginning of 2024—which means your financial management needs won’t be, either. It goes without saying that the New Year is a perfect time to assess whether your current financial support structure is hurting or helping.
Here are some considerations:
- What are your growth plans in 2025? And, a related question: Do you have the expertise needed for those growth plans? If you’re planning on scaling your business or creating more income streams, assess whether the team you currently have in place has the skills and expertise to support your next stage.
- Do you need a fractional CFO? A fractional CFO can bring enterprise-level financial expertise without the full-time cost, helping with everything from funding strategies to operational efficiency improvements.
- Is it time to bring in a controller? If you’re spending too much time managing day-to-day financials or need stronger internal controls, a controller might be the missing piece in your financial team.
- Are your current systems scalable? Evaluate whether your financial software and processes can handle increased transaction volumes, more complex reporting needs, and additional users as your business grows.
‘Tis the Season for Taking Action
The key to success with your business finances isn’t trying to do everything at once. It’s making consistent, strategic improvements that align with your business goals. Whether you tackle these solutions independently or bring in expertise to help, the important thing is taking that first step toward better financial management in 2025.
Need help implementing these solutions? Let’s talk about how strategic financial leadership can transform your business in the coming year.