To welcome the new year, small businesses can turn over a new leaf and take control of their finances from the outset. We look at 16 tips for small business owners to organise their finances in 2016.
1. Revise Your Budget
Take time to re-examine your income and expenditure. Find patterns of expenditure that you could do without in the new year or revise spending habits to make your money work harder and smarter for you. You may also want to consider using a cloud-based expenses tracker to keep your outgoings more organised.
2. Clear Bad Debts
The last thing you want is to roll over bad debts or outstanding bills to the new year. Making your debt repayment strategies a top priority can ensure you pay off any outstanding business payments more quickly and efficiently.
3. Go Paperless
With the proliferation of cloud-based business tools and mobile apps, it’s easier than ever for small businesses to go paperless and organise everything on digital platforms. A paperless solution can also enable you to keep tighter and more efficient records come tax time.
4. Set Up a Business Account
While sole traders aren’t legally obliged to open a separate business account, it can be an easier and effective way to track business income and expenditure, especially come tax time.
5. Revise Your Bookkeeping System
Many small businesses are often too time poor to think about good bookkeeping, but with the latest in automated cloud-based systems available, it has never been easier to get those accounting books more organised for the end of the financial year.
6. Tailor Your Invoices
If chasing up late invoices was your downfall in 2015, make revising your invoice payment terms and conditions a priority for the new year. Reformat and edit your invoice template to ensure it has clear due dates and easy-to-follow payment instructions.
7. Declutter and Simplify
Take time to simplify bill payments, invoice payments and consolidate debts to improve cash flow management and efficiency. Leverage the latest in account-keeping software platforms to streamline processes moving forward.
8. Review Your Insurance Policies
The nature and scope of your business may have changed considerably over the past 12 months. Take time to review your business, product and public liability insurance policies to ensure they are still relevant for the changing nature of your current business practices.
9. Set New Financial Goals and Targets
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 bird’s-eye perspective can enable you to identify key priorities and inefficiencies that you will need to tackle in the new year.
10. Protect Your Business Against Security and Fraud
Small businesses that leverage technology, e-commerce platforms and electronic payments need to pay close attention to cybersecurity issues to ensure data is protected at every client touch point. Regular software updates and anti-virus tracking can help ensure both you and your client’s data is protected from any cyber threat.
11. Use More Than Just a Spreadsheet for Finance Tracking
Gone are the days when finance tracking was a static spreadsheet. With the increased use of mobile, finance tracking can be viewed and managed on the go wherever your business may take you.
12. Boost Your Savings Plan
All small businesses need to have a backup savings 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.
13. Forecast for the Year Ahead
Give your business the best chance at staying afloat by forecasting cash flow for specific periods throughout the year. This will help you get a picture of where the business will be so you can adjust your strategy to deal with the lulls.
14. Plan for Big Expenses
Whether you’ve been in business for one year or 10, chances are you’re ready to forecast the times big expenses come around. Planning a year in advance for the larger expenses and help reduce the financial blow and ensure your cash flow stays strong even in the tightest months.
15. Call in a Professional for Help
If accounting, bookkeeping and general cash flow management are giving you nightmares, then leave it to the professionals. Don’t lose sleep over something an experienced financial expert can help you tailor and streamline.
16. Review Your Numbers Regularly
Business cash flow is not static, and complacency will only lead to financial failure. Just like an athlete who is regularly training, revising and improving, ensure you revise and review your finances weekly, identify weak spots, refine, tweak and continually improve. Over time, these small changes can lead to drastic improvements in business efficiency and commercial viability.