In 2023, a poll looked at Nevada business owners and the biggest challenges they faced. Entrepreneurs listed problems such as adjusting to inflation, finding new customers and managing cash flow. The problems varied somewhat, but they all centered on money difficulties.

The reality is that small businesses tend to face more financial challenges as they have fewer resources than larger companies. It's easy to make mistakes, especially at the end of the year when things get busy. Let's look at six common year-end financial mistakes entrepreneurs make and how you can avoid these issues.

Related: 6 Financial Mistakes Small Businesses Make All the Time

1. Don't regularly monitor your finances

Many entrepreneurs make the mistake of not regularly monitoring their business finances. They may delegate this responsibility to someone else and have little insight into how the company is doing.

Working with financial professionals is a good thing, but you need to understand your company's finances a little. Failure to monitor your finances can make your business more vulnerable to cash flow issues and fraud.

It will also be more difficult to make informed decisions about employment and long-term investments. To avoid this error, revise yours financial statements regularly and stay on top of metrics like your cash flow, working capital and net profit margin.

2. Not planning for taxes

Tax season comes once a year, but if you're a small business owner, you should plan for taxes all year long. Adequate tax preparation will make tax season much less stressful and help you avoid unnecessary fines and penalties.

According to the IRSone of the biggest mistakes many businesses make is not paying their estimated quarterly payments. If you pay less throughout the year, you could be hit with a penalty. It's a good idea to work with an accountant who can let you know how much you owe each quarter.

Another common mistake businesses make is failure share their business and personal expenses. Doing so can cause you to miss out on deductions and can generally become a huge headache when it comes time to file your taxes.

Make sure you have a separate bank account and credit card for all business expenses. The right accounting software allows you to track and categorize these expenses and will automatically generate financial statements for you.

3. Failure to account for year-end expenses

When you're doing your financial forecasting, it's important to account for one-time, year-end expenses. For example, you may need to pay for a holiday party and Christmas bonuses for your employees. Your business may need to purchase additional inventory to account for increased customer demand. You may also want to invest in a year-end marketing push.

Because these expenses fall outside of your normal financial planning, it's easy to underestimate the impact they'll have on your budget. Plus, bonuses and marketing campaigns tend to be variable costs, making them more difficult to plan. You can predict these costs by reviewing your company's expenses from the past year or two.

Related: 9 year-end must-dos for all business owners

4. Avoidance of all debts

Many people grew up learning that debt is a bad thing and should be avoided at all costs. And in your personal life, this is probably true in many cases. But as a business owner, debt can be a tool you can use strategically to grow your business.

For example, a small business loans or line of credit may allow you to purchase inventory or make a major investment in your business. Just make sure the purchase aligns with your long-term business goals and that you have a plan to turn it around.

5. Neglecting inventory management

If your business sells products, inventory management will be the key to your financial success. Having too much or too little inventory can lead to cash flow problems, lost sales and customer churn. Inventory management problems usually occur because businesses rely on spreadsheets or manual tracking and don't have real-time knowledge of their inventory.

The best way to solve this problem is by using inventory management software. The right software allows you to make data-driven decisions and save money by eliminating excess stock levels. It can also make it easier to negotiate with suppliers and fulfill fulfillment orders.

6. Going into the new year without a financial plan

If you want your business to continue to grow, you need a plan and specific goals for how you will achieve that plan. The end of the year is a good time to sit down, review the past calendar year and come up with a financial plan for the coming year.

Review your balance sheet, income statement and cash flow statement to spot any financial trends in your business. Make sure your accounts receivable are up to date and review your vendor contracts. It's also a good idea to review your insurance policies to ensure your coverage keeps pace with the growth of your business.

Related: Avoid these 10 mistakes entrepreneurs make with money

Once you understand where your business stands, you can start planning for the new year. There are no guarantees in the business, but adequate financial planning it's the best way to ensure your business has the resources to meet its goals.