With many businesses back in the swing of things after the Christmas break, now is the perfect time for SME owners to review and overhaul their financial management practices for the year ahead.
For some small business owners, the New Year offers the chance to wave goodbye to a bad year and welcome in a better one. For others, it presents an opportunity to build and improve on twelve months of success.
Either way, effective financial planning is critical for any business of any size to help reduce financial risk and assist with business growth. It is therefore important that you take a look back at what worked for you last year, what didn’t and what you would like to improve on in 2014.
Once you’ve established this it’s time to put your new plan into action. Below are some hints and tips on how to approach your financial management this year.
1) Get organised. Far too many of us leave our filing to one side, making a promise to ourselves that we’ll get round to it tomorrow. Before we know it, the end of the financial year is upon us and we’re left panicking about misplaced receipts and unaccounted for expense claims.
2) Stay on top of deadlines. SME owners should ensure they are familiar with important deadlines throughout the financial year. In 2012/2013, 11 per cent of small businesses in Australia missed a BAS deadline with three-quarters saying they had simply overlooked the submission date*.
3) Prepare a budget. A budget is essential if you are to keep well and truly on top of your finances. Make it a key part of your business plan for 2014 and beyond. This way you’ll be able to keep better track of where you’re making profit and losses, where you need to make cuts and in which areas you need to invest more.
4) Set (realistic) growth targets. Clearly the number one goal for all businesses this year will be to make more money. However, in order to do this you need to outline a realistic plan of how you’re going to achieve this. Firstly, you’ll need a solid financial plan that will guide you through the next 12 months. Set targets that are ambitious without being unrealistic – you want to be stretched, not stressed, next year.
5) Seek help where it’s needed. You need to consider whether or not you can achieve your financial goals without additional assistance. Do you have the financial support you need to grow this year? You may need to look into products and services, such as working capital loans, that will add value to your business and help you grow. Have a chat with your bookkeeper, accountant or bank manager if you think you may need to consider borrowing working capital.
A bookkeeper can help with organising your financial management and setting you on the right track for 2014. Contact us on 1800 082 066 or click here to find your nearest First Class Account bookkeeper.
*Source: First Class Accounts Small Business Barometer 2013