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Tackle Year End Like A Boss: 8 Steps to Close your Books and Plan for 2024

By Diane Amato

Published November 21, 2023 • 11 Min Read

No matter how many years you’ve been in business, taking certain steps at year-end can help you tie up any loose ends and set yourself up for a great year ahead. Here are 8 essential steps to take as we close out 2023.

1. Sum up your business financials

The end of the year is a great time to do a financial roundup, which ultimately starts with gathering your financial statements. Look at your income statement, cash flow statement and balance sheet to understand your current financial standing clearly and to forecast the year ahead. This is also a good time to leverage some fundamental financial tools and ratios, which can help you evaluate the performance of your business and identify potential pitfalls.

Here are some ratios to consider using to benchmark your business:

Also called Working Capital Ratio, this calculation indicates whether your business has enough cash flow to meet your short-term obligations, act on opportunities and look good in the eyes of potential lenders. It can also help you avoid cash flow problems before they surface.

Divide your current assets by your current liabilities. Ideally, your Current Ratio should fall between 1.5 and 2 — a ratio of 1 means you may not have enough money to last the year, while a ratio of more than 2 could mean you’re not investing enough into your business for the future.

Your Debt Ratio shows the percentage of your business’ assets financed by creditors. It’s a ratio a lender will look at before lending money to your business, so it’s wise to know this number before planning the year ahead.

Divide your total debt by your total assets. A good Debt Ratio largely depends on your industry, but anything below 0.3 is considered fair. With anything above 0.6, it may be difficult to obtain additional loans.

This calculation shows you what percentage of your income is profit after paying for the cost of doing business. These costs include labour, materials and other production costs. While it can help you assess your company’s financial health, it’s best used to track your company’s performance over time or benchmark your business against companies in the same industry.

Subtract your expenses/ cost of goods sold from your net sales (gross revenues minus returns, allowances and discounts). Then, divide that number by your net revenues and multiply by 100% to calculate the gross profit margin ratio.

The Debt Service Coverage Ratio (DSCR) is a key measure of a company’s ability to repay its loans, take on new financing and make dividend payments. Different debt providers may have different numbers they like to see; however, the greater the value over 1.25 (125% coverage), the better. The key value in calculating DSCR is identifying your company’s net income. If your business has a growth plan requiring investor/lender assistance, it is important to maintain a strong DSCR.

To calculate DSCR, divide net operating income by debt service, which is the sum of all current debts, including principal and interest.

Tip: Gather your bank and loan statements early so that you can identify any gaps that need filling and have your documents on hand for when you’re ready to do your review. Should you require bank confirmation of account balances, it’s best to initiate your request as soon as possible, especially if your year-end is Dec 31st.

2. Find ways to save money in the year ahead

2023 was a tough year for many Canadian businesses. Rising interest rates increased the cost of borrowing, and inflation boosted the cost of goods, materials and supplies. Doing business in 2024 likely won’t be cheap, so it will take some creativity, negotiation and resourcefulness to find opportunities to save. Here are a few ideas to stretch your dollar:

Tips for finding savings:

  • Reduce your variable costs. From inventory management to utility costs and subscriptions to marketing, evaluate expenses and consider how you can become more efficient with your spending in 2024.

  • Assess your credit cards and loans. There are easy ways to maximize your business credit card’s potential while saving on borrowing costs, such as rewards points, leveraging the grace period and paying off the balance on time. There may be ways to reduce your repayment costs if you have loans.

  • Utilize tax credits. Tax credits can help reduce the amount you pay on your taxable income and can make a difference to your bottom line come tax time.

  • Get creative with hiring and retaining talent. Employees today value the opportunity to learn new skills and grow professionally. If you have a new role to fill, consider upskilling the talent you have in-house to save on the higher cost of new labour. Or, find young talent that matches the skills you’re looking for. Magnet helps you hire students and cost-effectively integrate learning opportunities.

  • Evaluate your supplier terms. Year-end is a good time to assess your accounts receivable and accounts payable terms to see if there are any opportunities to affect your cash flow and save some money. Are there any early payment discounts available? Could you extend payment terms with your long-term vendors to ease cash flow pressures?

More money-saving tips5 Tips to Help Find Hidden Savings and Offset Rising Business Costs

3. Tap into funding opportunities

Business owners can tap into several new and unique opportunities that make it easier to access capital and grow their businesses.

Programs to consider:

  • The Canada Digital Adoption Program (CDAP). This $4 billion investment is designed to help small and medium-sized businesses get online with new digital tools. Learn more about CDAP here

  • Other grants relevant to your business. Non-repayable government grants can help you expand, create jobs, advance innovation, launch environmental initiatives and more. GrantMatch can help you find and secure government funding

  • The Canada Small Business Financing (CSBF) program. While not technically a funding program, the CSBF can ake it easier for businesses to access financing. Through the program, the government is providing a partial guarantee to lenders on behalf of eligible businesses, enabling businesses to start or expand their operations while taking on less personal risk than typical lending scenarios. Learn more about the CSBF program

  • RBC Black Entrepreneurship Program. RBC offers resources, funding and support to help create opportunity, growth and equity for Black entrepreneurs, including loans up to $250,000 to help start, manage or grow a business. Learn more about this program

  • Programs for young business owners. Futurpreneur offers access to business resources, financing and mentoring to help owners aged 18 – 39 build and grow a business. See how Futurpreneur can help

4. Do some scenario planning

The last few years have thrown an array of curveballs at business owners, making scenario planning an essential part of running a business. Often defined as “what if” planning, business scenario planning involves making assumptions on what the future will bring – and determining how these situations, or scenarios, will affect your business.

For instance:

  • What if interest rates rose by over 3% in a year?

  • What if you lost half your clients?

  • What if you cost of raw materials doubled?

  • What if your biggest supplier didn’t pay you on time?

Scenario planning lets you see alternative versions of your future business, giving you the opportunity to detect potential pitfalls or cash gaps before they happen. It can also stress test your plans against a variety of situations.

Tips for stress testing your business: RBC Small Business Talks: Incorporating Scenario Planning into your Business Plan

5. Get ready for tax season

While you’re not required to file your taxes for several months yet, there are some steps you can take now to prepare yourself for tax season. For example, are any activities you can take on now that will relieve your 2023 tax burden? Can you maximize tax credits, such as research and development or marketing incentives? If it makes sense for your business, are there any major purchases you can make and claim for this year?

Tip: It’s a good idea to chat with your accountant about possible things you can do in 2022 to minimize your taxes come spring and to estimate how much income to take out your business in 2023. It’s also smart to start organizing your business expenses and receipts now!

6. Do an operations check-in

When you’re caught up in the day-to-day running of your business, it can be easy for some of the maintenance activities to slip through the cracks. The end of the year is a great time to check that some key elements of your business are functioning as they should. Ask yourself: Are there areas of your operations you can streamline for greater efficiency? Are there new tools and platforms you can use to help make your business run better? Consider these Beyond Banking Services offered at special rates to RBC clients:

  • The RBC Go Digital program can help you adapt to changes in the digital world, access new technologies and differentiate yourself in a disruptive market.

  • Sherweb can help you access digital tools to enhance productivity, communication, collaboration, data analytics and your business operations.

  • Offers on mobility, internet, security, and business connect plans can help your thriving business.


  • Check that all your software is up-to-date and that your cyber security measures continue to align with your business needs. Learn how to become cyber ready

  • Check your marketing channels to ensure your website, social media, and Google listing are all up to date.

  • Clean up your customer, vendor and supplier databases — add, remove and update as needed!

  • Review your insurance policies to ensure they line up with the size and scope of your business today.

7. Take stock of your wins — and share them!

By the time December rolls around, it can be tough to remember everything that happened earlier in the year. Take some time to review your wins and accomplishments for 2023, beginning last January 1st. By itemizing all the great work you and your team did this year, you can see how your business grew, adapted and evolved — and it gives you a great opportunity to share a positive recap with employees, vendors and clients.

Tip: Email valued clients, suppliers, and vendors, thanking them for their contribution to helping you make it through 2023, along with highlighting your business successes and any new plans for 2024.

8. Prepare your 2024 Business Plan

When was the last time you looked at your Business Plan? Whether it was a decade ago or last year, now is the right time to review your plan and make necessary adjustments to align with your current goals and circumstances, as well as the state of the current economy. Many business owners also take this opportunity to review compensation packages at year-end to remain competitive — more than ever, attracting and retaining employees has become a top priority. Be diligent about employee evaluations; properly managed evaluations can play a crucial role in employee performance and boost job satisfaction.

Evaluating and refreshing your 2024 Diversity, Equity and Inclusion goals — and embedding them into your Business Plan — is also a good exercise at this time of year.

Tip: Set some 2024 financial goals. An important part of your business plan is your numbers, so refreshing your financial goals is one way to keep it current and your business moving forward. Some goals could include better cash flow management, reducing debt, investing more in your business and reducing expenses. Try the free RBC Business Plan Builder Tool to help you get started on your 2024 plan. Read our article How to Build the Best Business Plan Ever: Step-by-Step Guide for further inspiration.

Bottom line

Taking a close look at how you ended 2023 can help you strengthen your business in the face of challenging economic conditions, enabling you to take on the new year with optimism and confidence. And thinking outside the box when it comes to funding, hiring and operations can open up new ways of doing business that can lead to greater efficiency, productivity and resilience.

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This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.

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