July is the start of a fresh financial year, so there is no better time to set new goals and start planning for the growth and success of your business. At Cloud CFO, July is always a goal-setting and strategy month not only for us, but also for our clients. Here are our tips to help better your business over the next 12 months:
Prepare
Moving forward by looking backward may sound strange, but taking some time to review your past financial year will help you to understand how your business has changed and may identify what you need to do to move ahead. Did your business grow? Were there any concerns? Did your expenses run over budget? In short, try and understand how your business has changed over the past year. If it’s grown, fantastic – keep pressing ahead and come up with new goals. If it hasn’t, ask yourself why and examine the figures to find out more. If you’ve not set goals in the past, make this year the time to start. Goals give your business direction; however, setting actionable goals requires precise intention rather than merely thinking that you’d like to achieve something. Your goals will need to be specific, measurable, attainable and realistic, and you must put a target date in place for achieving them. If you set a big business goal, break it down into smaller steps to help keep things on track.
Work in the cloud
Moving to the cloud in the new financial year makes good business sense – we’ve explained why in our latest newsletter – and with so many Small and Medium Businesses (SMBs) taking advantage of this cost-effective solution, it’s important and worth mentioning again. Cloud accounting is about storing and accessing your financial information and files over the internet, rather than on your computer’s hard drive. Cloud accounting providers offer unlimited storage, security and ease because there’s no need to update software or back-up your data. The many benefits to cloud accounting include 24-hour access to your financial information on any device and anywhere with internet access, and up-to-the-minute data that allows you to make informed decisions to better your business. If you are considering a move to cloud accounting, doing so this month will position you strongly for the year ahead.
Plan and budget
You will need a solid budget to manage your money. A detailed budget will determine whether you have enough money to keep your business up and running, expand, employ staff and pay yourself. Without a budget, you risk spending more money than what you have, or not spending enough to grow and compete. A good budget will reflect expected income and expenses, your business goals and where you can cut costs. Remember to factor in a buffer in case your estimates end up being a bit short, too. If you need more information about preparing a budget, our budgeting post here will help.
Better manage cash flow
If there is one resolution you make for your business this year, make it to master your cash flow. The goal of cash flow management is to delay outlays of cash for as long as possible, while encouraging your debtors to pay you as quickly as possible. You will need to prepare cash flow projections, review your receivables and have a plan in place for shortfalls. An accurate cash flow projection for the year ahead – that will be monitored regularly throughout the year – is a must-do in order to plan for your future as it can alert you to trouble before it strikes. You may also need to look at ways to improve receivables, which is the speed at which you are paid. Techniques you could implement to do this include prompt invoicing, installment plans or discounts for customers who pay quickly. Finally, shortfalls – a lack of cash to pay your bills – are a real risk for SMB owners, so develop an emergency plan just in case it happens. This may be a line of credit from your bank, extended terms from your suppliers or the sale or lease of assets. For more cash flow advice, please click here.
Seek advice from an expert
Now would be a great time to get professional advice from an accountant or business advisor. A good advisor will review your financial records, help with business objectives and set you on a solid financial path for the year ahead. Better still, why not delegate your financial work to an accountant or Virtual CFO so you can concentrate on growing your business? Time away from your business spent doing bookwork can distract and dilute your focus, so outsourcing to an expert could be a cost-effective way for you to save time, reduce stress and better your business.
Put even one or two of our suggestions in place over the next 12 months and you will be more organised, more focused and – potentially – more successful at the end of the next financial year. Happy planning!
Cloud CFO provides customised CFO and accounting services for small to medium businesses, helping them to understand their financial position, manage overall business performance and grow their business. Please email us at info@cloudcfo.com.au or post your questions in the comments.