NEW YORK — One of the tasks that many small business owners tend to put off until the last minute is year-end bonuses — they don't make their first calculations about how much they can afford to give and which employees will be receiving them until the year is almost over. Or, they may not even have decided whether they want to give bonuses in the first place.

Savvy owners start considering bonuses in November or December for the coming year, budgeting for them based on their projections for revenue, cash flow and earnings. They make adjustments as the year progresses, and then, in the last months or weeks, make their final determinations about amount and who the recipients will be.

"We try to budget at least as much as we've paid the prior year," said Don Silver, chief operating officer of Boardroom Communications Inc., a Plantation, Fla.-based public relations firm with about 15 employees. Silver said the company has paid bonuses throughout its 16-year history.

Laura Grimmer, president of New York-based Articulate Communications Inc., said she sets an ideal target for a bonus, makes sure she has some cushion besides that amount, and "I start planning to lay aside certain percentages based on where we are."

Grimmer, who gives bonuses to seven employees, had given out the money on the anniversary of a worker's hiring. Now, with her company three years old, she's switching to year-end bonuses because "I'm starting to see trends in revenue and profits."

These owners have already decided to give bonuses. They view bonuses as more than just a holiday gift or thank you for a job well done — they recognize that bonuses are an incentive for employees to do well. And, bonuses make a company more competitive as an employer.

"If you're not showing people that you appreciate their work, they're more likely to be wooed away by another company," said Jeannette Boccini, a principal with LVM Group Inc., a New York-based public relations firm. "It goes a long way in terms of retention."

Boccini said LVM was using bonuses rather than salary increases because "the nature of a bonus is to show that the company has been profitable as a result of everyone's commitment to the firm."

Determining the reasons for awarding a bonus, and how much money to give, can be confusing. There's no one formula, or right way to do it — some companies award bonuses based on how long an employee has been with the business, while many others base the amount on how well the company fared during the year and how much the employee contributed to its success. In the latter case, each owner must decide how much weight to give to each factor.

At Boardroom Communications, bonuses are based on several criteria. "We do look and see how the company did, the longevity of the employee and their performance," Silver said.