Managing Your Cash Flow
Getting your finances in order for the New Year
4 min read
21 November 2016
In just a few weeks’ time businesses up and down the country will be preparing for the Christmas downtime, and while it may be tempting to enjoy the quiet period while it lasts, now is the perfect chance to reflect on the last 12 months and plan ahead to the New Year – especially when it comes to getting your finances in order.
You’ll be giving yourself the best possible start to 2017; and you’ll be ready and raring to go when work starts to pick up again mid-January. Here are some suggestions of places to start when it comes to getting your finances in order.
Review your business plan
Whether you’ve been up and running for a year or 20 it’s always a good idea to go back and review your business plan – after all it’s the foundation upon which your company was built in the first place! It will help reacquaint you with your goals, objectives and strategies and give you an idea of where you’re at. Behind where you’d like to be? Look at which areas you’re underachieving/underperforming and write a step-by-step plan of how you’re going to get your finances in order over the next three, six, nine or 12 months.
Set some new goals
If you’ve surpassed what you set out to achieve then maybe it’s time to set yourself some new goals! Whether that’s increasing your turnover or profits by ten per cent, expanding your workforce or exporting to new markets, goals can ensure that you stay motivated and on track. As a guidance, visionary goals usually fall within four general areas: service, social, profit or growth.
Reconsider your software if you want your finances in order
Now is also the time to choose, renew or change your accountancy software. Cloud accounting has seen a massive growth in popularity over recent years and is most useful for people/businesses that are on the go 24/7! The main advantage of cloud accounting is that you can access your accounts using a mobile device and take photos of receipts and expenses and upload them instantaneously.
Nowadays there are also quite a few free softwares which businesses can use to keep accounting records in good shape, and thus finances in order. Some softwares are available as a desktop version i.e. VT Cash Book, and others are cloud-based, such as Wave and Capium. And when recording business transactions it’s a good habit to separate business and personal expenses, so that when it comes to dealing with your end of year accounts you haven’t got to go through as many receipts or invoices to decide which category they fall into.
Keep up-to-date with changes in the law
If you don’t have an accountant then it’s vital that you stay on top of any changes in order to avoid falling short of the law. In the accountancy and tax world these happen pretty frequently so it may be worth signing up to receive emails from your favourite news outlets, or set yourself a few Google Alerts. Making Tax Digital is one area to be aware of, with more news expected shortly now that the consultation period has finished. The government initiative will implement a fully digital tax system by 2020, affecting a wide range of taxpayers, including most businesses, self-employed people, landlords and individual taxpayers.
Mariah Tompkins, founder of WKM Accountancy