There is always a lot to think about at the start of a new year, but as a small business owner, spending a little time re-evaluating your business practices will stand you and your finances in good stead. Here are a few tips.
Revisit your budget
Making time to speak with your accountant or financial adviser, and setting your financial forecast and budget for the year ahead, will be time and money well spent. Having an accurate overview of cash flow and payment planning, including taxation payments, means that you can really start to set yourself realistic and smart business targets and keep your company on track. Now is the time to revisit any loans on premises, equipment or transport, for example, and look at whether there is any room in your budget or savings plan to increase payments and reduce the amounts on company credit cards.
Carry out a SWOT analysis
Once you have your budget in order, you can carry out a Strengths, Weaknesses, Opportunities and potential Threats (or SWOT) analysis, and look at opportunities that will assist with your cash flow management. Review the number of software packages you can use to help with administrative areas of your finances, such as digital invoices, for example. These will reduce paperwork and staffing time, and digital invoices do tend to get paid quicker, which assists in the management of cash flow – an area that is a financial weakness in many small businesses.
Become more “tax smart”
This doesn’t mean that you need to have extensive knowledge of the taxation system, but that you implement a process to ensure you stay on top of the requirements of the tax system and are aware of changes that will affect your business. The first step is making sure that you do get everything in on time, so you need to have a system of recording and storing all relevant records and receipts.
Your tax agent and accountant will be able to assist you with diary dates and submissions, while ensuring that you are up to speed on new regulations such as changes to superannuation rates, which could affect you if you employ staff. You should also check the Australian Tax Office website for relevant updates and submission date requirements in order to best maximise your tax return for the next financial year.
Make sure you meet your financial obligations
Keeping accurate records of your transactions is vital for any business, large or small, and they do need to be comprehensive, updated and stored securely. Get into the good habit of keeping records of buying or selling and ownership of business transactions, carrying out regular stocktaking, and keeping an updated record of your debtors and creditors. As well as ensuring that all of these processes are in place and making sure you complete your fringe benefit tax return, you will also continue to meet your financial obligations and have a tighter control over your business finances.
Start 2015 on the right foot by getting your small business finances on track with these tips, and hopefully, by the end of the year, you will have more money to invest in helping your business to grow.