Looking at your tax forms for the year gives you a detailed history of your individual income. If you’re a business owner, your corporate tax return should give you the same kind of assessment of your business revenue stream, deductions or exemptions, and costs.
While it’s a favorite adage of ours here at Bplans that “Planning is not Accounting,” the two processes go hand-in-hand. Accounting, the process of looking backward into the past in great detail, should inform your planning process for the next year, giving you a better basis for making estimates about general revenue streams, expenses, and personnel needs.
If you’re not already doing Plan vs. Actual analysis at least every quarter, use this tax season as a reminder to get started.
Sara Prentice Manela