As the end of the year approaches, many businesses begin to think about making big purchases.
Whether it’s a new piece of equipment or a large order of inventory, end of year CAPEX spending can have a significant impact on a company’s bottom line.
However, while end of year spending can be a great way to take advantage of tax benefits and budget restrictions, it’s important to do your homework first.
Because the last thing you want is to get caught in any unnecessary tax issues when it comes to your business.
What Are Some Ways to Prepare for End of Year CAPEX Purchases?
Here are a few tips to help you prepare for making end of year CAPEX purchases:
- Know your budget: The art of budgeting is not an easy one, but it’s essential to any business. It can be difficult determining just how much you should spend on CAPEX purchases for maintenance or new acquisitions of your business depending upon your company’s needs both for the present and the future.
By creating a budget this allows the decision-making process to become a little easier.
Make sure to include all potential sources of funding, such as loans or lines of credit.
- Separate Expenditure Budgets: The separate budgeting for capital expenditures makes it easier to calculate any prospective tax issues.
For operational expenses, deductions apply year-to-year while those who invest in new equipment can take advantage of depreciation which reduces their taxes over time…which let’s face it is a win for your business.
- Do your research: Research the products or services you need to purchase and compare prices from different vendors. You may also want to consider renting or leasing options instead of buying outright.
- Create a timeline: Once you have an idea of what you need to purchase and how much it will cost, create a timeline for making the purchase. This will help you stay on track and avoid last-minute scrambling.
- Get approval: If you’re making a large purchase, make sure you get approval from the appropriate decision-makers within your company. This will help avoid any surprises down the road.
As we move into the end of the year, it’s important to remember that there are still opportunities to make CAPEX purchases that can save your business money in the long run.
Capital expenditures are necessary for any company, but they can also be risky.
By planning ahead and doing your research, you can find the best deals and make sure your business is getting the most value for its money which will help set you up for future goals.
Not sure what type of CAPEX purchases will be beneficial to your business?
Contact me today! I will walk you through everything you need to know and more in order to reach successful growth as well!