The first of the year is a great time to take inventory, both figuratively and literally. To help you do that, here are a few tasks that should be on your New Year's checklist:

Update your balance sheet. A balance sheet is a financial document that lists everything your business owns (assets) and the debts the business owes (liabilities). This document is a snapshot of your business.

It will allow you to see what debts you have coming due in the next 12 months, and what assets you have available to pay off those debts. It is important to develop a balance sheet early in the year. This financial document can help you assess purchases and sales.

Write a marketing plan. For many of us, it is hard to "pull the trigger" when it comes to selling, but written marketing plans can help make selling easier. Marketing plans consist of a series of marketing statements, such as the following: Sell X number of bushels at $X.XX per bushel by X date.

By breaking the total amount you have to sell into smaller units, and setting both price and date goals, you can more logically analyze your marketing strategy. Marketing plans are not written in stone; they can be adjusted as the market changes. However, without a written plan, it is much easier for emotion to take hold of the decision-making process.

Develop a monthly cash flow budget. Once you have a balance sheet and a written marketing plan in hand, the next step is to develop a monthly cash flow budget for your operation. One of the challenges of farming and ranching is that the bills come in monthly, but the paychecks come in quarterly or annually.

This requires you to plan your cash flow more carefully than other businesses. When are the bills due? When do the checks from sales come in? What months do you have a cash deficit? How much do you need for an operating loan or line of credit? This process helps you combine the information from your balance sheet and marketing plan, allowing you to make necessary adjustments to both input expenses and sales.

Review and update your estate plan. Did anything big happen in your life in 2020? The death of a family member, a divorce, a purchase or sale of land, or the birth of a child or grandchild? These big events could mean that you need to update your estate plan to reflect these changes.

There are three considerations: end-of-life documents such as powers of attorney and health care directives, at-passing documents such as wills or trusts, and business succession or transition planning.

More importantly, you need to make sure that all your documents are in order and that your family knows where to find them. As University of Nebraska-Lincoln Professor Emeritus Ron Hansen says, "If something happens to you today, does everyone know what to do tomorrow?"

Meet with your team of advisers. The start of the new year means meetings with each of your advisers: banker, financial planner, investment adviser, elevator, agronomist/crop scout, insurance agent, lawyer, landlords and veterinarians, just to name a few.

These meetings allow you to get a second opinion on the balance sheet, cash flow budget, and estate plan you developed in the previous tasks and look for ways to improve your business in the coming year. If you are looking to make major changes to your business in the new year, it may be beneficial to meet with these advisers simultaneously.

For example, meeting with your financial adviser, tax accountant and lawyer in a single meeting about your estate plan may help streamline the process.

Hold an annual meeting. An annual meeting is an opportunity to reflect on current state of the business and layout plans for the coming year. Minutes of annual meetings should be recorded and filed.

These annual meetings are especially important if you operate within a legal entity that provides liability protection, such as an LLC. It is likely that when you formed a legal entity, you included in your organization papers that you would hold annual meetings. It is crucial that the rules of the entity are followed, otherwise the liability protection provided by the entity could be jeopardized.

For more information about farm and ranch management topics such as marketing, farm finances, farmland leasing and estate planning, visit farm.unl.edu.

Groskopf is a Nebraska Extension educator and agricultural systems economist.