…Of the year.  Well, it’s right around the corner and if you are like most companies YEAREND TAX PLANNING and YEAREND PLANNING are probably on the forefront of your mind. 

For most companies YEAREND TAX PLANNING consists of a combination of the following:

• Accelerating/Decelerating revenue and expenses between 2010 and 2011 (keeping in mind effect of Bush tax cut expiration)
• Acquiring and expensing qualifying assets up to $500,000 for 2010 (and 2011)
• Acquiring assets that qualify for 50% Bonus depreciation
• Increasing Contributions to 401k, Roth IRA, Keogh etc.

 YEAREND PLANNING consists of getting your financial statement in the best possible condition for presentation to external stakeholders such as Banks, Lenders, and Partners.

Best possible condition includes accumulating cash balances, strengthening your current ratio and increase working capital.  Some recommended steps for completing this are as follows:

• Review your accounts receivable and calculate your DSO (how fast you collect) and take the necessary steps to reduce your DSO to industry average or less.
• Reduce your inventory (reserve for slow moving and obsolete inventory) and prepaid expenses where applicable.
• Replace debt incurred by financing with short-term lines of credit with long-term financing.
• Move your LOC from Current Liability to Long-term liability by renegotiating the maturity date of your line of credit (only if you do not have a “Subjective Acceleration Clause”).
• Take necessary steps to remain in compliance of restrictive covenants on Bank or other Debt.

As with any financial recommendations, you will want to consult your Tax and Corporate Financial Advisor prior to considering these strategies as they can tell you whether (or to what extent) these strategies can benefit your specific company.