We’re already a month into the new financial year - but it’s never too early to take control of your finances to boost your balance sheet.
Financial spring cleaning should be an essential part of every business’ long-term plan as it can help to identify areas of inefficiency as they crop up. What’s more, it can also improve your overall performance in a number of areas - some of which may surprise you.
Here are five key tips to help UK businesses streamline their financial operations and prepare for success in the year ahead.
The first step in streamlining your business operations is to carefully review your expenses. While we often do this during the year on an ad hoc basis, seeing costs laid bare and directly comparing value versus worth in a dedicated timeframe can help you uncover patterns you may have missed.
You should take care to seek out and identify any unnecessary or excessive costs, which will help you to consider ways to reduce them. Look for opportunities to negotiate better prices with existing suppliers, switch to more cost-effective products or services if necessary, and cut back on non-essential expenses wherever possible.
It’s 2023 and automation is moving up a gear. In fact, it’s now pivotal to streamlining your financial operations. Be on the lookout for jobs that are especially onerous or that take up a lot of time. Speak to your workforce and ask candidly what could be done to improve workflow processes and, where possible, which jobs could be automated.
Even something as small as taking the time to set up a rolling Standing Order for a regular supplier in place of ad hoc invoices for consistent services may prove beneficial.
Setting clear financial goals is essential for any business. While we can all be guilty of entertaining idealised or overly ambitious projections, it pays to be realistic and manage short, medium, and long-term financial goals.
This includes identifying revenue targets, profit margins, and cash flow projections. Measuring them against past performance can also help to identify patterns, giving you a heads-up if an especially buoyant or reserved pay period is approaching. By setting measurable goals, you can track your progress and make adjustments to your operations exactly as needed.
It’s unavoidable: cash flow is the lifeblood of any business. Make sure that you have a robust cash flow management system in place which will serve you in good stead. This means you’ll need to regularly review your accounts receivable and payable, create a suitable cash reserve, and implement a solid debt recovery process.
It may pay to look at which of your customers typically pay late or take their time clearing their balance; in such situations, it can be beneficial to have a candid chat with them and explain the need for prompt payment. One way to encourage this could be offering a discretionary discount for payments received on time - if of course, that’s amenable.
Reviewing your finances on a regular, recurring basis is vital for identifying areas of improvement. It’ll help you to make informed decisions about the future of your business and manage evolving expectations.
This includes tracking key performance indicators (KPIs) such as revenue, profit margins, and cash flow against actual performance on the bottom line. You should use this information to make informed decisions about your operations driven by data, which may reveal surprising opportunities for growth and the prospect of spreading into new markets - either domestic or international.
Getting on top of your financial operations is essential for maintaining a healthy business. By reviewing your expenses, automating time-intensive processes, setting financial goals, improving cash flow management, and rigorously reviewing your financial performance, you can prepare your business for success in the year ahead.
Duncan & Toplis offers a range of accountancy and business advice services to help UK businesses achieve their financial goals. Contact our team to learn more.
Looking for more than a quick dust? For a thorough deep-clean of your finances, get in touch today.