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10 June 2020
Whatever industry you're in, or the size of your business, here are 5 things you can do to get on top of your financial health.
Writing out a plan will give you an understanding of how your business is put together and the direction in which it’s heading. This plan can help your business perform how you want it to, so you can ultimately achieve your business – and by extension, your personal – goals.
Setting a 12-month budget that you can work to will provide you with your forecast. A budget is an itemised summary of income and expenses for the coming year. This allows you to review at a glance how much money is coming in and going out. Once you have a budget, you can then prioritise your spending and plan for times of the year when business might be quieter.
Waiting for late payments can put pressure on a business’s cashflow. Making your invoicing process as efficient as possible will benefit your company. Is there an opportunity to incentivise on-time payments from customers? Look at the terms and conditions you have with your suppliers – if your suppliers are expecting payment from you at certain times of the month, are you putting pressure on yourself by having big gaps between when you have to pay them and when you receive money from your customers?
Administrative tasks take time, often soaking up hours in the day and taking your eye off your business’s core tasks. Today, there are plenty of tools which assist business owners by helping automate reporting and management processes. Xero, for example, offers intuitive features to help businesses save time on accounting and administration and can be accessed from anywhere your business takes you.
Engage the services of experts that are focused on helping you map out the steps you need to take to make sure your business is in a healthy position. A good accountant should report on the numbers, but crucially, should also suggest what to do next, not just overload you with numbers and data. Your accountant should be providing meaningful advice and support for your business and help you through short term obligations and hurdles, as well as plan for the long-term.