1. REVIEW YOUR FINANCIAL SYSTEMS
Has tax time prompted you to review how you currently manage your finances? If there’s room for improvement, now is the perfect time to consider moving to the cloud and automating some of your financial processes.
Cloud-based accounting tools, like QuickBooks Online, automate a number of financial activities, such as payroll, invoicing, payments and expenses. Turn on Goods and Services Tax (GST) tracking and it will even automatically track and calculate your GST, so, when you’re ready to lodge your Business Activity Statement (BAS), it’s quick and simple.
2. KEEP TRACK OF YOUR EXPENSES
Now more than ever, small business owners need to find ways to lower their expenses. One way to claw back the costs is to review supply contracts (e.g. electricity and telephone contracts) that are coming to an end and negotiating lower prices or switching suppliers.
Other ideas include buying in bulk, pooling resources with other businesses, paying invoices early in exchange for discounts, and rewarding employees with non-monetary bonuses such as flex-time.
If you’re struggling to stay on top of your admin, QuickBooks has made life easier with their Smart Receipt Capture function.
3. REFINE YOUR CASH FLOW STRATEGY
You’re not alone if managing your cash flow has become a constant struggle, particularly with the impact of lockdown restrictions on business operations and turnover. However, even before the pandemic, cash flow woes were one of the most common reasons cited for business failure. That is why coming up with new plans and tactics to prevent your cash flow from falling short should be your priority.
QuickBooks’ new Cash Flow Planner tool uses machine learning to provide real-time cash flow predictions over a 90-day period based on patterns in users’ data and bank history. This can give you a clearer picture of where you stand and how to manage expenses. And since it automatically uses your bank history to make predictions, there’s no need for tedious data input on your end.
4. GET EXPERT ADVICE FOR MORE THAN YOUR TAX RETURN
According to QuickBooks research, profitable small businesses are about 10% more likely to use an advisor (58% ) than those not using one (48%)*. While the number one piece of advice a small business would give others looking to start their own venture, is to pay for the advice of an accountant or bookkeeper, with almost half (48%)* of small business owners in agreement.
The hard-to-predict nature of the COVID-19 health crisis means that financial management is already more complex and fast-moving than ever before – a situation that’s unlikely to change in the immediate future.
On top of reducing your day-to-day admin, an accounting advisor can actively stay on top of assistance programs and regulatory changes to put your business in the best position possible.
If you aren’t already leveraging an accounting advisor for more than your tax return, it might be time to reconsider. You can find a ProAdvisor near you here.
5. ADJUST YOUR FORECASTS
As well as leaning on the advice of an expert accounting advisor, you should also update your financial forecasts and goals. This should cover sales and expenses, and projected cash flow. Base these on previous data over the same period for accuracy.
Creating new forecasts will give you a good idea of what you’re going to make and what your costs will be over the next 12 months. This can help you plan and manage your finances better.
Once you’ve created your forecasts you should then set your financial goals. These could be related to profitability, margins, cash flow, or a different metric specific to your business. Make sure to update forecasts with a significant bit of fat built-in for ongoing economic uncertainty or new waves of pandemic-related restrictions.