Planning for a more efficient financial year
As the financial year comes to a close for many businesses, there is usually a flurry of activity to get all accounts up to date and finalised for the financial year end. It can be a stressful time and one that can provide a real headache for business owners – some of whom will be more organised than others!
For those who don’t feel they have robust or adequate processes in place to head into the next financial year, getting organised now is crucial. Putting in place some simple processes to help with accounting throughout the year will reap rewards.
Good book-keeping provides the best foundation to smooth business accounting – when it comes to all things business accounting, book keeping is actually at the heart of it all. From budgeting and forecasting to monitoring cash flow – these activities are aided by up-to-date data and figures, which efficient accounting is key to. It’s a chore, we know, but there are accountancy software solutions available nowadays that significantly reduce the burden of such tasks. Whether generating repeat invoices, tracking and logging business mileage or filing expense claims, the latest software systems available can make light work of it all – completely digitising the process for paperless accounts that can be easily handed over at to an accountant the end of the financial year. The earlier those accounts are submitted, the easier budgeting for tax liability becomes.
Plan ahead when it comes to business expenditure – winging it from one month to the next may be how some business owners operate, but planning ahead when it comes to expenditure will help prevent any issues arising from over-spending. Whether it’s a planned investment in equipment or staff, or an office renovation, make sure the expenses are properly planned and in line with expected revenue for the year. Regularly reviewing the business finances will help keep plans on track.
Cash flow is the lifeblood of the business – many a business has failed because of cash flow issues, which can be wholly preventable. Therefore, monitoring cash flow is not only helpful for business planning, it could be the make or break of the business. Cash flow issues can often arise from inadequate invoicing processes, so it wise to ensure thorough knowledge of invoicing procedures of all customers. Some may work on a purchase order number system, some may have specific contacts to whom invoices be sent and some may have supplier payment terms that are longer than expected. Getting to grips with the varying processes will help with planning, ensuring steps are in place to keep things running smoothly whilst the business is awaiting payments. Keeping in touch with customers’ finance departments to keep abreast of invoice progress is also a good idea.
Why not make some financial new year resolutions to help the business run smoothly and avoid a headache in 2018?