With the start of the new tax year in the UK coinciding with the spring season, now is the perfect time to give your business finances a spring clean.
At One Click Accountant, we are passionate about helping businesses grow without stress. We believe that everyone should have access to affordable, clear, high-quality accounting and business advice.
In this article, we’ll provide you with 12 tips to help you review and improve your business finances, from setting financial goals to attending training seminars.
1) Set the financial year’s goals
Determine the financial goals that you want to achieve in the coming year. This will help you focus on the areas that need improvement.
Take the time to define specific, measurable, achievable, relevant, and time-bound (SMART) financial goals for your business.
Make sure they align with your overall business strategy and objectives.
Share these goals with your team so that everyone is working towards the same targets.
Review your goals regularly throughout the year and adjust them if needed.
2) Step back and do a financial inventory
Review your financial statements and assess your cash flow, expenses, and revenue. This will help you identify areas where you can cut costs or increase revenue.
Conduct a comprehensive financial inventory of your business. This includes reviewing your financial statements, balance sheet, cash flow statement, and income statement.
Analyse your revenue sources, expenses, and profit margins.
Identify areas where you can cut costs and increase revenue. This will help you make informed financial decisions and develop a sound financial plan for the year ahead.
3) Book an appointment with a tax professional
Consult a tax professional to ensure that you are taking advantage of all the available tax deductions and credits.
They can also help you stay compliant with tax laws and regulations, and avoid costly mistakes.
Discuss any changes in tax laws that may affect your business, such as new tax credits or deductions.
Keep in mind that a tax professional can also provide valuable financial advice and planning services.
4) Streamline your systems and processes
Identify areas where you can simplify your business operations and automate tasks to save time and reduce costs.
For example, you may be able to use cloud-based accounting software to manage your financial transactions more efficiently.
You could also consider outsourcing non-core functions such as bookkeeping, payroll, or IT support to reduce overhead costs.
Streamlining your processes can save you time and money and improve your overall business performance.
5) Stay up-to-date with tech
Keep up-to-date with the latest technologies and software that can improve your business operations and increase efficiency.
For example, you may be able to use social media platforms to promote your business or cloud-based project management tools to collaborate with your team.
Consider attending technology conferences and workshops to learn about the latest trends and tools.
This can help you stay competitive and improve your business efficiency.
6) Separate business from personal
Establish a clear separation between your personal and business finances to avoid confusion and to make tax reporting easier.
Open a business bank account and use it solely for business transactions. Use separate credit cards, invoices, and receipts for personal and business expenses.
This will help you stay organised and avoid any legal or tax issues down the line.
7) Renegotiate Payments Terms
Renegotiate payment terms with suppliers and creditors to improve cash flow and reduce expenses.
Review your payment terms with suppliers and creditors to see if you can negotiate better rates or more favourable terms. This can help you manage your cash flow and improve your bottom line.
Consider offering early payment discounts or negotiating longer payment terms with your suppliers.
Be prepared to negotiate and don’t be afraid to shop around for better deals.
8) Chase up payments
Follow up on late payments from customers to ensure a steady cash flow and reduce the risk of bad debts.
Send reminders and follow-up emails or calls to customers who have not paid their invoices.
Be polite but persistent and establish a clear payment policy for your business.
This will help you manage your finances more effectively and maintain a healthy cash flow.
9) Raise your prices
Consider raising your prices if you haven’t done so in a while. This will increase your revenue and improve your profit margins.
Analyse your profit margins and determine if your prices are competitive with your market.
Keep in mind that raising your prices may lead to a temporary dip in sales, but it can also increase your profit margins and improve your overall financial performance.
Communicate any price increases clearly to your customers and emphasise the value that your business provides.
10) Attend workshops and training seminars
Attending industry-specific workshops and training seminars can provide you with valuable opportunities to learn new skills, stay up-to-date with the latest trends and best practices, and connect with other business owners and professionals in your industry.
These events can help you gain insights into new technologies, tools, and strategies that can improve your business operations and make you more competitive.
You can also learn from the experiences of other entrepreneurs and experts, and build relationships that can lead to future collaborations and partnerships.
Consider attending local, regional, or national conferences, webinars, and workshops to expand your knowledge and network.
Don’t forget to apply what you learn to your business and share your insights with your team.
11) Look for grants and R&D tax credits
Explore available grants and tax credits for research and development to help fund innovation in your business.
There are various grants and tax credits available for businesses to support their research and development efforts.
Take the time to research and understand the eligibility criteria for these programs and explore the various options available.
You may be surprised to find out how much financial support is available to help you develop and improve your products or services.
These programs can also help you stay competitive and innovative in your industry, which can ultimately benefit your bottom line.
12) Review your insurance coverage
Review your insurance coverage to ensure that you are adequately protected against potential risks and liabilities.
Your insurance coverage is important for managing business risks and liabilities. Regularly review your policies to ensure that you have the right coverage.
Work with an insurance broker to assess your needs and explore options.
Check your policy’s deductibles, limits, and exclusions to ensure you have adequate protection.
Proactively managing your coverage can minimise potential financial losses in case of an unexpected event or accident.
A spring clean of your business finances can be an opportunity to assess your financial health, identify areas for improvement, and make changes that can lead to better business performance.
By following these 12 tips, you can streamline your systems and processes, stay up-to-date with the latest technologies, separate your business from personal finances, renegotiate payment terms, chase up late payments, raise your prices, and attend training seminars.
Regularly reviewing and optimising your business finances can help you achieve your business goals and ensure long-term success.
We hope you’ll find these 12 tips useful.