A new financial year is a great opportunity to do some admin housekeeping and hit the reset button by ensuring your business is operating as efficiently and profitably as possible, while also mapping out your business plans for the next 12 months. Here are four things you can do to start the new financial year in a good place and have your business reap the benefits in the long run.
1. Automate and streamline your processes
In most cases, businesses will have some kind of cloud-based accounting software, such as Xero, set up. If you don’t, you really should. The new financial year is the perfect time to implement new systems and processes. If you already use online software, there may be ways to make it more efficient and to get the full benefit out of it. By reviewing time-consuming manual procedures, you may find ways to streamline them, saving yourself valuable time and money.
2. Review, review, review
Start the new fiscal year afresh by spending some time analysing the data you have on your financial performance so you can make informed business decisions. Review your profit and loss to get a better idea of your income and expenses. When reviewing income, you can consider things like whether your pricing is right. Are you under-pricing, or maybe over-pricing and therefore, deterring customers? Are your products appropriate for your target market? Do you require new or different income streams? Should the products or services that aren’t profitable be discontinued?
It’s also imperative that you consider all expenses and how you can reduce them. Can you renegotiate contracts for things like rent, electricity, insurance, telephone and internet? Are your suppliers the most cost-effective or can someone offer you the same product at a cheaper price? Are your supply chains still available post-COVID-19? Are you staffed appropriately? Using rostering software such as Deputy can help you with this and help you analyse wages versus budgeted income for any given day.
3. Set goals and track them
The new financial year is the best time to reassess your business goals, and set new ones if that’s needed. Always remember to make your goals SMART: Specific, Measurable, Attainable, Relevant, and Time-Based.
Once you’ve set your goals, make sure that you take the time to monitor them throughout the year. A good way to do this is by using the management reports available in your software, or by using one of the specific reporting apps that are available. This makes the process simple and efficient and gives you a better understanding of your business and its performance.
4. Make sure you’re compliant
Consult with your accountant or bookkeeper to check you’re compliant with any changes to legislation. Most changes that occur are dated 1 July, so you’ll need to ensure you’re across any that apply to you. One example is the change in the superannuation guarantee rate to 10 per cent. There are also changes to pay rates that came in on 1 July, which impact your reporting obligations. Speak to your accountant or bookkeeper to understand what these changes mean for your business to be sure you’re complying with your reporting obligations.
Getting your house in order by taking the time to reflect, review and implement these changes can seem time-consuming, but it will pay off in the long run and may result in stronger cashflow and a healthier profit margin. Make this the year that your business not just survives but thrives.