As 2026 comes to a close, business owners have an opportunity to do more than review their annual revenue and expenses. Year-end is an important time to evaluate financial performance, identify potential tax savings, and make decisions that can strengthen the business heading into 2027.

Whether your business has experienced significant growth, faced unexpected challenges, or maintained steady performance, taking time to review your finances before December 31 can help you make more informed decisions.

Here are five important financial questions every business owner should consider before year-end.

1. How profitable is your business, really?

Revenue growth is encouraging, but it doesn't always translate into greater profitability.

A business may generate more sales while experiencing higher labor costs, operating expenses, or other financial pressures that reduce its bottom line.

Before year-end, take a close look at your income statement and compare your financial results with prior periods.

Consider the following:

• Has revenue increased or decreased compared to 2025?

• Are operating expenses growing faster than revenue?

• Which products, services, or customers generate the strongest profit margins?

• Are there expenses that could be reduced or managed more effectively?

Understanding profitability can help you make better decisions about pricing, staffing, service offerings, and future investments.

Financial reports to review: Income statement, budget-to-actual comparison, and profitability by service or business segment.

2. Is your cash flow strong enough to support your plans for 2027?

A profitable business can still experience cash flow problems, particularly when customer payments are delayed or expenses increase.

Before the end of the year, review your available cash, outstanding receivables, upcoming obligations, and anticipated expenses.

If you're planning to hire employees, purchase equipment, expand operations, or introduce new services in 2027, consider how those decisions will affect your working capital.

A cash flow forecast can help you identify potential shortages before they become a problem.

Financial reports to review: Cash flow statement, accounts receivable aging, accounts payable aging, and cash flow projections.

3. Have you taken advantage of available tax planning opportunities?

Tax planning is one of the most important reasons to review your business finances before December 31.

Depending on your business structure and financial circumstances, there may still be opportunities to reduce your 2026 tax liability.

Areas to discuss with your CPA include:

• Equipment and technology purchases: Evaluate whether planned purchases qualify for available depreciation deductions and whether the timing makes financial sense.

• Retirement plan contributions: Review available business retirement plan options, contribution limits, and applicable deadlines.

• Business expenses: Confirm that eligible expenses are properly documented and recorded.

• Estimated tax payments: Determine whether your payments are sufficient based on projected income.

• Income and expense timing: Evaluate whether the timing of transactions could affect your tax position, based on your accounting method and applicable tax rules.

It's important to remember that tax deductions should support sound business decisions. Spending money solely to generate a deduction isn't always the best financial strategy.

Working with your CPA before year-end can help you identify tax planning opportunities while there's still time to act.

4. Are your financial records accurate and up to date?

Accurate bookkeeping is essential for reliable financial reporting and tax preparation.

If your accounts haven't been reconciled regularly or transactions have been categorized incorrectly, your financial statements may not provide an accurate picture of your business.

Before year-end, make sure you've addressed the following:

• Reconcile bank and credit card accounts.

• Review outstanding customer invoices and unpaid vendor bills.

• Verify loan balances and interest expenses.

• Review fixed asset purchases and disposals.

• Confirm payroll records and contractor payments.

• Identify transactions that need clarification or correction.

Taking care of these items now can make tax preparation more efficient and help reduce surprises when filing your business tax returns.

For growing businesses, professional accounting and bookkeeping support can also help establish more consistent financial processes throughout the year.

5. Do you have a financial plan for 2027?

Year-end financial planning shouldn't focus exclusively on what happened during the past 12 months.

It's also an opportunity to establish realistic goals and determine what resources you'll need to achieve them.

Start by considering your priorities for 2027.

Are you planning to increase revenue? Improve profitability? Hire additional employees? Expand into a new market? Invest in equipment or technology?

Once you've identified your goals, develop a financial plan that supports them.

Your plan should include:

• Revenue and profitability targets

• Expected operating expenses

• Staffing and compensation needs

• Cash flow projections

• Planned equipment or technology investments

• Tax planning considerations

A well-developed budget provides a useful benchmark for monitoring financial performance throughout the year.

Rather than waiting until next December to evaluate results, schedule regular financial reviews to measure progress and make adjustments as needed.

Why year-end financial planning matters

Business owners are often so focused on serving customers and managing daily operations that financial planning gets pushed aside.

But reviewing your finances before year-end can help you identify problems, take advantage of tax planning opportunities, and prepare for the decisions ahead.

For businesses in Glen Burnie and throughout Maryland, proactive accounting and tax planning can provide valuable insight into financial performance and future growth opportunities.

At Albert J. Bartlinski & Associates, we believe financial information should do more than document what has already happened. It should help business owners understand their options and make better decisions about what comes next.

Year-end business financial planning FAQs

• When should a business begin year-end tax planning?

  Ideally, tax planning should take place throughout the year. However, reviewing your financial position during the fourth quarter is especially important because certain tax planning decisions must be completed before December 31.

• What financial statements should business owners review before year-end?

  At a minimum, business owners should review their income statement, balance sheet, cash flow statement, accounts receivable aging, and accounts payable aging. These reports provide insight into profitability, financial obligations, and available cash.

• Can year-end tax planning reduce my business taxes?

  Potentially. Tax planning can help identify eligible deductions, credits, retirement contributions, and other strategies that may reduce your tax liability. The opportunities available depend on your business structure, income, and specific circumstances.

• How can a CPA help with year-end financial planning?

  A CPA can help evaluate financial performance, identify potential tax planning opportunities, review financial records, and develop strategies that support your business goals.
  

Make the most of the time remaining in 2026!

Now is the time to evaluate your financial position, address outstanding accounting issues, and identify tax planning opportunities before the end of the year.

Albert J. Bartlinski & Associates provides business accounting, tax planning, bookkeeping, and advisory services to help business owners make informed financial decisions.

Contact our team to schedule a year-end financial and tax planning consultation. We can help you identify opportunities, address outstanding financial concerns, and prepare your business for 2027.