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Five Business Tips For The New Financial Year
If you’re in business, it’s probably the same old story every new financial year: you tell yourself you’ll do things better/differently. And yet … you often repeat the mistakes from the year before.
Whether it’s a side hustle or a bigger venture, finding practical money-saving tips for the new financial year in your business can help make this a better business year.
To ensure this new financial year really is different for you and your business, try these practical tips.
The new financial year marks a great time to reassess your financial practices and see how you’re tracking. Not sure where to start? Use this checklist to run through some of the tasks critical to good financial practice and help set up your business for the months ahead.
1. Check your cash flow
It’s the lifeblood of any business, so making sure your cash position is a healthy one is critical as you plan the new financial year.
Create a cash flow statement: with an accurate overview of the money that flows in (and out) of your business over a defined period (typically a quarter, but try a month if you want a closer analysis), you will gain a deeper understanding of your business position.
Create a cash flow forecast: this estimates how much cash will flow through your business in future.
2. Make sure your financial statements are up to date
Financial statements deliver valuable insights and give you a clearer picture of your business’ health. The two key types of financial statement to focus on include a balance sheet (a statement of your financial position at a defined time that outlines all your assets, liabilities and equity) and a profit and loss (P&L) statement (this tells you how much money your business has actually made but subtracting your income from your expenses to reveal your profit).
3. Review your expenses
Before you can think about reducing or consolidating expenses in your business, you have to know exactly what they are. To help you boost your profit margin in the new financial year, think about taking some proactive steps to make a positive difference.
Negotiating with suppliers can sometimes get you great results that lead to a better deal and more profit. By looking for more competitive pricing, or even just adjusting payment terms, you can free up cash flow and save.
When it comes to utility providers, explore government rebate offers and shop around. Energy companies that want your business often have deals for those who ask.
Paying debts via payment plans can also help manage cash flow but be careful if those payment plans attract interest debt that may send you backwards, rather than forwards.
4. Do you have the best possible business structure?
The way you started in your business may not suit the way your business has grown and evolved. Talk to your accountant to check if there is a more tax-effective business structure to suit your business needs as you plan for a new financial year.
5. Review your business marketing plan
That’s if you even have one. And if you don’t, there’s no time like the present.
Outlining both your short-term and long-term goals is a good start. Effective marketing is about testing and measuring so you do not waste money and time on marketing strategies that yield poor results. If you haven’t managed your marketing like that in the past, it’s important to change for the better.
Knowing your competition and exploring new business opportunities can make an amazing difference to your bottom line.
The bottom line
To get the new financial year off to the best possible start for your business, remember these key points:
Stay up to date – when it comes to tracking your cash flow and financial statements, this is especially important.
Reduce ongoing expenses – times are tough for lots of people but to help you stay afloat, look for sustainable ways to consolidate or reduce some ongoing expenses and enjoy some better breathing space in your business.
Review your business budgets, strategies and goals.
Research options to create growth and expansion in the new financial year.
Go deeper: Hot tips to grow your business on any budget in the new financial year
Financial disclaimer
The information contained on this web page is of general nature only and has been prepared without taking into consideration your objectives, needs and financial situation. You should check with a financial professional before making any decisions. Any opinions expressed within an article are those of the author and do not specifically reflect the views of Compare Club Australia Pty Ltd.
