If you need guidance on how to make your finances work harder in 23/24, you’re in the right place.
The start of the new financial year is a line in the sand that you should use as an opportunity to make your business more profitable and efficient. As a small business owner, it’s important to get your finances in order and make sure you’re on track to achieving your goals. Here are some tips to help you start the new financial year on the right foot:
1. Reflect and review
Take some time to review your business’s performance over the past year. Review your profit and loss statement, cash flow statement, and balance sheet to see where your business stands financially. Ask: where did you do well? Where did you struggle? Ask what you would do differently if you had the time again and learn from your mistakes. If the problems look like they are going to come around again, figure out how you’ll handle them now.
Aim for a diversity of viewpoints in your reflect and review process to help you make informed decisions that will have an impact on the success of your business.
2. Set new financial goals – and achieve them
Based on your review of the past year, set new financial goals for your business. Make them SMART: specific, measurable, achievable, relevant, and time-bound. (For example, you may want to increase your revenue by 20% in the next 12 months.)
Once you have set your financial goals, create a budget to help you achieve them. This will help you keep your expenses in check and ensure that you have enough cash flow to run your business. Whether you need to obtain funding or adjust your prices, make sure to review your budget regularly and adjust it as needed.
It is essential to plan ahead when it comes to your finances. Developing a financial plan will help you to identify and prioritize goals for the year ahead. It will also help you to measure progress as you work towards achieving those goals.
3. Good record keeping is next to godliness
Think of maintaining accurate financial records as essential data hygiene for your business. What is your current system for keeping receipts, invoices, and other financial documents in order? Does this need review as well? If you’re fresh off the hard work of sorting out messy financial records, you should feel incentivised to have a better system in place.
Financial software packages can take a lot of the heavy lifting out of staying on top of the day to day tasks of record keeping – and in some cases, automate it completely.
4. Understand your liabilities – and opportunities
It is essential that you understand and comply with all tax regulations that apply to your business. This includes registering for VAT if your annual turnover exceeds the threshold, filing your self-assessment tax return and paying your tax liabilities on time. You can get advice and support from HM Revenue and Customs, your accountant or bookkeeper, or other business support organizations.
As well as tax liabilities, consider other risks that are coming your way: has your business been impacted by Brexit? Will rising costs affect your customers’ spending habits? What will you do if a key contract comes to an end and doesn’t renew? Bad things happen, but the storm is easier to weather when you’ve got a solid plan.
But it isn’t all about pain: there are opportunities as well. The UK government is constantly reviewing tax incentives for SMEs, and you should take advantage of those for which you are eligible – for example check out the latest on R&D tax credits.
As well as tax breaks, there are a number of grants that you should consider applying for. You should check the Swoop grant finder tool regularly for the latest schemes – some of them are worth millions.
Reducing your tax and winning a grant will go a long way to improving your bottom line.
5. Ask the experts
There are no two ways about it, money can be complex. If you’re not a financial expert, consider getting professional advice to help you manage your finances. This could be in the form of an accountant, a bookkeeper, or a financial advisor. They can provide you with valuable insights and advice on managing your finances and achieving your financial goals.
Other business owners may also be able to help, from recommending good accountants to sharing tips on new growth opportunities and partnerships. There is huge value in networking with other business owners who have been through similar experiences.
Starting a new financial year can seem overwhelming, but with careful planning, attention to tax incentives, and obtaining advice from professionals, it can be a catalyst towards ensuring that you stay on the right track for a successful year ahead.
By staying up-to-date with changes in tax laws, setting achievable financial goals, and managing your cash flow carefully, you can set yourself up for success in the coming year.
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