New Financial Year Resolutions: Get your business fit and firing for the new financial year
As we head into a new financial year, now is the opportune time to get your business in shape and to set plans in motion to make FY2025 your best year yet!
From a financial management perspective here are some of the key new year resolutions you can start putting into action now to give your business the best chance of reaching its financial goals.
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Set a profit and loss and cashflow budget in place for the year. A budget serves as a financial roadmap to your business and is essential to help you execute your strategy but can also guide this and help you decide what is feasible or not. A good budget should:
- Detail your Capital expenditure requirements
- Establish the HR requirements you need to execute your plans
- Be used as an opportunity to review your finance facilities and ensure these are adequate and appropriate
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Have a plan to actively manage and review your financial performance and forecasts on a regular basis.
The ideal is to have an expert advisor such as a CFO helping you with this, with some best practice tips as follows:
- Set your Profit and Loss up so it is easy to analyse. This means tracking your sales and costs by key service/product categories and grouping expenses in to 5-6 key groups
- Work to align your accountant and bookkeeper with this new reporting format.
- Meet regularly with an advisor to review and establish an action plan on the back of the insights from your results
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Put in place a system for regular cashflow tracking and ongoing management. Many business failures stem from poor cash flow management. Having a system of tracking your cashflow and using this as a basis for forward forecasting will go a long way towards more reliable cash management.
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Tax planning
It’s not too late to set in place some simple tax planning strategies in the current financial year that will help you better manage your tax obligations in the new financial year. Here are some of my favourite tips:
- Writing off bad debts – if you know a trade debtor is unrecoverable write it off in your accounts to claim the GST back and get the tax deduction.
- If you are in a position to, pay your super obligations up to date before the June cut-off date to be able to claim this as a tax deduction.
- Defer income that has not been earned to the new financial year and ensure you account for all expenses that have been incurred in the current financial year.
- The Prepayment Rule – certain small businesses are able to use this rule which allows them to make payments prior to June 30 for eligible expenditure not yet incurred and claim this as a tax deduction.
The new financial year is the perfect time to make the changes needed to have your business fighting fit and ready to achieve its financial health goals.
Elevate your business to new heights. Let’s embark on this journey together! Contact us at info@bges.co.
Joseph Essey – Associate Partner – Small & Medium Business Advisory, Accounting and Financial Control
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