The end of the financial year can be an incredibly stressful, make-or-break time for small businesses. Indeed, according to ASIC research, 41 per cent of small-business owners say inadequate cashflow or high cash use is a driving factor in failing businesses, while 33 per cent are experiencing poor financial control, admitting that they are not keeping good records.
With this in mind, the end of the financial year (EOFY) is often a stressful time for many small businesses, but it doesn’t have to be. The new financial year provides an opportunity to make resolutions and set your sights on longer-term financial prosperity. By developing good habits today, next year’s EOFY should be less stressful and more serene.
Review accounts and bank statements
The most important first step is a thorough review of your financial situation. Reviewing accounts and bank statements over a 12-month period can seem like a daunting task, but it’s an essential one. When reviewing your statements check your account balance and outstanding invoices, forecast cashflow – the guaranteed income, likely income, etc – and account for non-negotiables like rent, taxes, wages, etc. Doing this now, maintaining a close eye throughout the new FY will enable you to keep a comprehensive pulse on your business’s finances.
Ditch the paper trail
Once you’ve reviewed all of your accounts, bank statements, and records, you’ll need to organise these documents for the EOFY. Keeping track of the paper trail can feel like an overwhelming task, so digitise your records. Organising your receipts can be a painful and time-consuming and inaccurate task, however, a digital approach increases productivity and transparency, saves time, reduces human error and makes it infinitely easier to master your money today, this year and at the EOFY.
To ensure you’re keeping track of the right records, you’ll need the following:
- list of accounts receivables
- list of accounts payables
- write off invoices that you believe cannot be recovered
- employee’s PAYG payment summaries and superannuation records
- stocktake
- receipts.
Evolving from a paper trail to digital-first requires a small commitment now, but is worth its weight in gold. The best way to organise your finances – from receipts, bills, invoices, and more – is to digitalise them.
Technology: your business finance experts
Today, there are many online accounting software platforms that manage your finances – from keeping you GST ready and organising your income and expenses, to automating business workflows and benefiting from holistic financial forecasts and analysis. But not all platforms are easy to use and streamline effectively into your business. So what should you look for?
There are some things to keep in mind when looking for an online accounting platform. Firstly, does it offer end-to-end accounting? This is important as it helps your business do everything from deal negotiation, to raising sales orders and invoicing. Having everything in one place makes it easier than ever for businesses like yours to keep track of finances effectively and easily. End-to-end accounting systems, such as Zoho Books, handle mundane accounting tasks so you can focus on your business.
Secondly, ensure that the accounting platform can be easily integrated with all the right people, whether it’s with vendors or cross-collaboration within internal teams. With role-based access, you can add your colleagues and your accountant to your organisation so they can log time, view reports, or manage your accounts. Finally, ensure that the platform can be easily integrated into other systems, and apps like a CRM or inventory management software, which boosts productivity and help your business scale sustainably.
By implementing these easy tasks into your daily business now, you’ll develop the good habits and best practices that will help make the mammoth task of the EOFY more manageable and less stressful.
