Be financially ready for the new year.
Forget joining the gym, giving up smoking, or taking up meditation; we have some hints and tips for business owners that will set you up for a more prosperous 2023.
One of the traps business owners can fall into is believing that having a great product or service is all you need to succeed. The unfortunate reality is that managing your business carefully and planning the next steps in your business journey could make all the difference between success and failure this year.
For many businesses, the new year is a time to take stock of what’s happened in the past 12 months and to make some decisions for the year ahead. Whether it’s planning to improve your cash position, take on new staff, or simply to improve relationships with suppliers, a fresh look at your business finances can help you along the next stage in your business journey.
Business finance tips for 2023
1. Review financial targets, budgets, and processes
Make sure you’re fully prepared for the new fiscal year and schedule time to speak with finance professionals
Start the New Year by revising your financial goals, sales targets, and short-term and long-term business vision. Taking time to re-examine your business from a birds-eye perspective can enable you to identify critical priorities and inefficiencies that you will need to tackle in the New Year.
Take time to simplify bill payments, invoice payments, and consolidate debts to improve cash flow management and efficiency. Also, think about the nature and scope of your business, which may have changed considerably over the past 12 months. Review your company, product, and public liability insurance policies to ensure they are still relevant to the changing nature of your current business practices.
2. Call in professional help
Business finances are never static, and complacency can potentially lead to the failure of any business. Just like an athlete who is regularly training, revising, and improving, business owners should continuously revise and review finances, identify weak spots, refine, tweak, and grow. Over time, small changes can lead to drastic improvements in business efficiency and commercial viability.
And if accounting, understanding your business finances, and general cash flow management is giving you nightmares, then don’t lose sleep over something an experienced financial expert can help you tailor and streamline, and seek external advice. If you have them, the first port of call should be AM AUDIT, which offers an incredible solution of financial expertise and process.
3. Review business finance options
Whatever your plans for 2023, there is an increasing number of financial options available to help both strengthen your current position, and also to fund growth. Whether you are looking for debt or equity, or are unsure of what finance might be right for your business journey,
If you already have business finance in place, make sure to review all your debts, and consider consolidating these to get a better deal,
4. Plan to succeed, but be prepared for any eventuality
Every business needs a backup plan in the event of a downturn. Take time in the New Year to consider whether you have enough savings to cover any potential business losses or to protect you when things don’t go as planned.
As well as your regular business overheads – rent, salaries, etc., your PAYE, and VAT payments come around regularly, so make sure to keep a buffer in reserve, and know exactly what your liabilities are.
Whether you’ve been in business for one year or ten, chances are you’re ready to forecast the time’s significant expenses come around. Planning for the more substantial costs can help reduce the financial blow and ensure your cash flow stays strong even in the tightest months.
If you have less than three months” of cash flow available to cover future overheads, salaries, and tax liabilities, then it may be worth considering a financial buffer such as a loan or overdraft to ensure your business is in a strong position for the year ahead.
5. Invoice quickly, and get paid faster
Cash flow is the backbone of any successful small business to ensure that you’re always covered for your expenses and the unexpected. Issue invoices for goods or services as soon as possible to ensure that you’re paid promptly, and your healthy cash flow will thank you. If your business relies on contractors, or you have significant costs incurred in advance of sales, it may be worth considering an asset-based finance option such as invoice finance or factoring to allow you to strengthen client relationships, and improve your cash position.
If chasing up late invoices was your downfall in 2022, make revising your invoice payment terms and conditions a priority for the New Year. Reformat and edit your invoice template to ensure it has precise due dates and easy-to-follow payment instructions.
6. Understand your business’s financial statement.
Financial problems, from a lack of working capital to unmanageable debt repayment schedules, are the primary reason that most small businesses fail – and still, an alarming number of business owners don’t understand their financial statements. If you’re among them, you’re missing critical information that can make or break your business, like your cash flow position, available credit, or debt obligations. While it’s wise to use the services of Abdulla Almulla Auditing of Accounts to take care of the day-to-day finance Accounting and bookkeeping, it’s still crucial to understand your business’s financial health.
7. Improve your business’s profitability:
To get your business where you want it to be financially, create a roadmap by using projections and an action plan to help you track performance throughout the year. Then, be sure to review your business’s progress against quarterly goals to help you determine where your business is headed and give you greater control over planning and growth.
8. Be Prepared For a VAT Check.
We can help you to understand how you can remain compliant while ensuring your business is structured correctly to benefit from any reliefs. We make sense of this complex area of tax so that you don’t have to worry about the differing VAT rates for different products. Our VAT Health Check will highlight any areas of concern, look at potential improvements to your VAT position, and outline any changes required to ensure your business is FTA compliant.
9. Understanding Company matrix
A Matrix Organisational Structure is a company structure in which reporting relationships are set up as matrices. Employees generally have dual reporting relationships, reporting to more than one supervisor or leader.
We will draw those company matrices for you to help efficiently organize your business.
10. Make the most of AM Audit
Many small businesses are too time-poor to think about proper Accounting & bookkeeping; it has never been easier to get your accounts more organized.
