A new year brings many great opportunities for business. Take advantage now to start your year on the right foot by organizing your important business documents and meeting licensing requirements.
Below are our top recommendations to ensure you’re ready for the year.
Update your business records and minutes
Throughout the year, various votes could have taken place, meetings held and important minutes taken. All of these should be stored in the company book for easy future reference. The start of the year is also the perfect time to change any bylaws or operating agreements as well as your official bylaws, if needed!
Renew all professional licenses
If your business requires professional licenses or certifications, be sure to renew them! Not only do most contracts you might have with your customers or suppliers require you to comply with all applicable laws, but your state’s corporations division can also fine you for non-compliance. Getting into the habit of regularly updating these licenses each year will avoid fines and possibly even future legal action against your company.
Renew and revise expiring contracts
Most contracts can be fixed-term or auto-renewing. Make sure any non-automatically renewing contracts you want to continue have been amended appropriately to extend the agreement between the parties. Conversely, be sure to provide the appropriate termination notice to cancel any auto-renewing contracts you no longer want. Failure to extend or terminate a contract can mean a loss of profit for your business.
Review contracts for authorized annual price increases
Many contracts have a built-in escalation clause. This is normally linked to the Consumer Price Index (CPI). Take advantage of the escalation clause and the ability to increase your revenue by knowing when you can request an escalation from your client. On the other hand, since the CPI is currently high, consider trying to renegotiate contracts where the escalation clause will cost your business money.
Update your contract files
Several changes may have been added to a contract throughout the year, including changes to extend or take advantage of escalation clauses. Take your contracts and amendments out of the desk drawer and file them with the appropriate agreement they might govern or modify. Keep your contract database up to date. Having a robust contract lifecycle management process can save you time in the future if you need to reference these agreements and track any positive actions you may need to take under them- this !