Below are a few tips on how you can do that:
1. Know your accounts
Set aside some time in your business to go through your accounts. It is important for a business owner to know where their business situation is financially. You have paid your bookkeeper to update your accounts, keeping track of your revenue and expenses as they happen. Make full use of this resource by going through your accounts every week at least. Not only you will have a greater understanding of your expenses, you can also make better decisions based on real and the most up-to-date financial information.
2. Secure your revenue
Be clear with your customers when you will invoice them, stick to that, and what are your terms of payment. You will not only avoid any miscommunications on fees, you will also minimise the risks of not getting paid on time, or worst, not getting paid to the price that you thought you will be getting after putting all your hard work servicing the customer.
3. Keep budgeting and set a target
Remember when you first start your business? You must have spent countless of hours going through your budget to ensure you have the right figures before you take the plunge. So, what has change? Sure, your business is going smoothly for a couple of years but do you know where your expenses will end up at the end of this fiscal year? More importantly, can you anticipate your future cash flow? Well, you can’t do that if you don’t know your projected income to begin with. Budgeting is a great tool to measure your progress financially. It tells you what happens in your business against your plan, enabling you to fine-tune your business to improve your performance. Setting financial targets is also a great way to help you stay focused and give you something to measure success against, for example, achieving 5% year-on-year growth, is this achievable?
4. Plan carefully for the year-end
Do yourself a favour, don’t wait till the end of the financial year before putting together all your accounting paperwork together. Even the most experienced business owner will tell you that going through all your financial documents at the end of the year can be a daunting task. If you don’t have a bookkeeper to assist you, the more the reason why you should perform a month-end file clean up. This is where you file all your invoices, receipts, remittances and any other accounting paperwork in chronological order. That way it will be readily available for anyone involve in the financial year end, to easily retrieve them and the onerous demands of your year-end accounts won’t bring your business to a standstill. Trust me, your accountant will thank you for it.
5. Turn to technology
With the advent of modern accountant technology, make full use of what is available out there to help keep track of your income and expenses more easily. Set alerts and reminders, manage workflow, and stay up to date with all your day-to-day business efforts.
6. Review your business plan
You’ve probably spent countless hours writing your business plan so don’t just leave it on the shelf. This important document highlights your vision and intentions of going into business at the first place. It has some of the components mentioned above, such as budgets, written on it. Set some time aside to review it at least once a year. Is your business plan still applicable, have you meet your financial targets, or perhaps you need to make some adjustments? By reviewing your business plan, it helps you focus on your business and make plans for the future.
If you need assistance in any of the items above, let’s chat and we will do our best to assist you!
Your Local Accountant – Scott Adams