Just
as January 1st is a time when we might take stock of our personal lives
and make our resolutions to do some things differently, so April 6th
– start of a new financial year - can be
a time when we’ve taken a fresh look at our business practices and decided what needs to change. What could you do
differently in future to get better results?
Is
all your paperwork in order, and all your bookkeeping
up to scratch? If you use outsourced
bookkeepers, the answer is probably yes. But they may still be able to give
you suggestions for improvements that could boost your results. Some of the
most important areas that have an impact on the bottom line are covered below.
Invoices
Do
invoices always go out without any delays? Do they always relate to a purchase
order number? Do they clearly state the amount that is due, with a breakdown
showing VAT? Are they always checked against the rules for VAT accuracy by
someone in the know? Do they clearly state your terms, the date the payment is
due and whether you retain the option to levy a legally allowed penalty for
late payments.
Credit Control
It’s
so important to have adequate procedures in place for this. Making credit
checks on new business to business customers is easily done before you extend
new credit, and it can save much heartache. Until this is completed, you could
ask for payment up front, or a large deposit, or you could simply delay your
service. Most reputable organisations will respect you for this and
collaborate.
Keeping
tabs on payments that are overdue could be in the remit of your bookkeepers. They could follow up for you or just inform you when
that is needed. A telephoned reminder often gets the desired result, or you
could find out if there is a problem and discuss how it could be dealt with.
Staged payments are always better than no payment, or perhaps you need to relax
your terms and give more time. If a client is going to be difficult, it’s
important to be strict about charging late payment interest and even taking
legal action to claim the compensation you are entitled to.
Cost Control
Where
could you cut costs? Is it time for some market testing or renegotiating with
suppliers? Can you save money by joining or starting a local purchasing
consortium? Can you cut staff costs and gain more expertise by outsourcing any
non-core business activities?
The Business Plan
This
will be a good time to review and update your plans. Did your financial
forecasts for last year work out? If not, why not, and what changes should you
be making? Does the plan include any development projects? If not, is it time
to add some? Will you need more funding? Where will it come from? What do you
need to be doing in order to get it?
Preparing
for a new financial year by addressing these areas could give your business a
lift. Involving staff and outsourced bookkeepers can
lift morale and motivation and propel you into the next tax year with momentum.
