End of Year Reset
END OF YEAR RESET
The end of the calendar year doesn’t always mean the end of your fiscal year, but it is often still a great time for reflection and reconciliation.
Reconciliation
Reconciliation to me, not only stands for assuring that the activity in your books reflects reality, but it also means measuring up that reality to what you expected or planned to happen. It is a time to evaluate where you missed the mark and where you surpassed your expectations.
It answers questions not only about reality but about how your efforts created that reality. It signifies what you can do, or not do, next time around. It is the history that we learn from. Examining accurate historical information is how we grow and do better. Your better might be more profits, less time working, more opportunity to fulfill your mission, or expansion to fulfill what you are working to really achieve when you and your team go to work every day.
Risk Mitigation
It also provides an opportunity for closure in areas that were outside of your control. How much money do you have set aside to cover your operations? I.e., how many months of your overhead do you have if revenue doesn’t come through? How can you build this if you have zero and at what point do you invest rather than save? Invest in new staff, new systems, new marketing or sales, or donor outreach?
Your “better” might be more profits, less time working, more opportunity to fulfill your mission, or expansion to fulfill what you are really working to achieve when you and your team go to work every day.
Risk is defined the possibility that something bad could happen. But a certain amount of risk can be healthy and foster growth. Risk is tied to innovation, growth, learning, and gains. You put something in knowing that you could receive a great return. You could also lose. Often, the bigger the risk, the greater the return. Therefore, the risks are usually calculated – what gain would be worth what risk?
Considerations for risks include demand, economy, financial, credibility. Being transparent about that risk to those investing their time, careers, funds, name, etc., can mean the difference to whether you win or lose. Knowing the risk involved can excite and empower your team to power through or in the case of a failed risk, can let them know that everything was done and what went wrong so that next time things can be different. Reckless risks without data to support them can do just the opposite.
Goals
The end of something signifies the beginning of something else. Reviewing the past and planning for risk are only part of this important end of year task. Where do you want to be in the next year? How do you plan to get there? Do you keep doing what you have been and double down or make some changes and push forward in another direction?
Where do you want to be in five years? In ten? It’s extremely hard to know what you need to do in the next year if you don’t know what you really want or where you want to be in ten. Take the time to dream and create the future that motivates the hard work and engagement of everyone on the team.
Celebrate
The process of reconciliation, reflection, setting goals, and planning for action is important all by itself. But, so is sharing and celebrating achievements and discoveries. Even when years or lessons have been hard it’s important to know that they are recognized and won’t be repeated. Your plans to manage risk and innovate for sustainability let everyone know that they are being led in a positive direction.
The act of remembering the good behind a win can make it so much sweeter. It’s important to take the time to complete things whether it is a project or a year. And don’t forget to include some build up and excitement for what lays ahead! These celebrations don’t have to be complicated or take a party planner. But take the time to create a fun and relaxed environment to renew the commitment you have with your collaborative team.
Want help?
When determining what will bring the most value to your time investment, I have found companies and non-profits of all sizes have a need for clarity of financials.
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