4 Financial Mistakes to Avoid this Winter

In the partial CFO profession, we see business managers forget critical year-end assignments while they do a mental check and go on vacation. Here are the top 4 financial mistakes to avoid this winter.

Paying Social Security Deferred Taxes

Remember how the government allows you to delay paying Social Security taxes? Back in March 2020, the CARES Act threw money at companies in dozens of ways (the most unique being PPP). But most companies also chose to defer Social Security taxes for most of 2020.

The deferred invoice is due for payment. You are required to pay half of that by 12/31/21, and the rest by 12/31/21 or face IRS penalties. Don’t rely on your payroll provider to do this automatically – you need to do this through the IRS website (more instructions in this article.)

Managing Major Resignation Risks

In modern American corporations, employee turnover expenses are too large for CFOs to responsibly ignore. Dozens of Inc.com articles have been written about The Great Resignation and they all point to the same solution: Take time to take care of your employees. Easy to say, hard to implement.

How can something so warm and ambiguous be a financial strategy? Budget training for your managers to improve their leadership. Hire DEI consultants to build equity in your organization. Give your manager more time to listen to and direct employees (which can mean fewer growth initiatives). It’s okay with less growth – growing trading profits for less risk is often the most financially responsible decision.

raise your prices

If you haven’t already, you need to raise your prices. There are two reasons to do this now. First, your costs will likely have already gone up or will go up next year (maybe because The Great Resignation will be taking key employees away from you soon.) Second, everyone is raising prices now, so, from a marketing perspective, you’ll be a voice in the crowd. This means less customer shock and contraction. If you wait until next summer to raise prices, you will remain in the market and possibly scare off customers.

Securing a loan before interest rates rise

With inflation rising, the Federal Reserve is expected to raise interest rates in March of 2022. This means that now is a great time to borrow money before the cost of borrowing increases. Borrowing money is also one of the top 5 inflation strategies.

Happy Holidays to all, I hope you have a prosperous New Year!

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

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