The past financial year was turbulent to say the least. It was also unexpected and it is a good lesson how quickly business and the economy can change in circumstances that are unpredictable and out of our control. In fact, the past financial year has been referred to as the toughest economic period in modern history of business.
However, the new financial year is always a good opportunity to reset, reflect and begin new initiatives. With the impacts of COVID-19 hitting many of us personally, financially and socially, reflections of new financial goals are likely to be significantly different this year.
Here are some ways that you can get some control back over your business and what you are focusing on to keep you on track and get through these times:
1. Review FY 2019/2020
You need to review your results for the past financial year. This will be a good starting point for setting goals for the new one. Make sure you evaluate the overall health of the business. Focus on cashflow, profitability, business debt and expenses. What happened last year? Then look at what you think is achievable for this year based on your results, and how you think the current climate may affect you for this coming year.
We recommend getting your FY 2020 accounts finalised as quickly as possible so that the data you are reviewing is accurate to assist with decision making.
Related: COVID-19: 5 Steps Plan to surviving the next 6 months as a business
2. Get help
In an effort to save money some businesses keep their accounting, bookkeeping, tax, compliance and payroll in house. You are carrying a lot of responsibility if you are trying to manage all of the above and with perhaps not the right skill level in your team to manage comprehensively. As a result, you can waste time or money in making ill-informed decisions. You should consider hiring Professional Accounting Services to outsource these tasks and to help you navigate your business through these uncharted waters. Making smart, timely and accurate decisions is so important to business continuation at present.
Related: How to get the most out of your Accountant?
3. Sales Goals – New Business
You should build sales targets that are aligned with your business growth strategies. Start with your results from your FY 2019/2020 review and then set some goals based on your latest performance. Consider how you think the current economic climate may impact your business in the next 12-18 months. Finally, look at what marketing activities you have planned that will drive new sales into your business and when. Practically if you have completed a review, you will have an understanding of how you are attracting new business and should utilise these methodologies to gain immediate traction for FY2021.
Any new marketing activities that can help generate sales might then fit well in a 90 day sprint format.
We often use the 90 DAY SPRINT METHODOLOGY to breakdown goals into achievable outcomes in a short burst. It’s about identifying milestones that you want to achieve in the next three months and detailing daily and weekly steps toward for you and your team to complete so you can accomplish your main objective.
4. Collections – Debt Management
One way to increase your cashflow is to ensure that you have a solid process for collecting payments and following up outstanding invoices. Make this the year you get on top of collections. You can use an invoicing system that automatically sends reminders and add additional payment methods such as credit cards to ensure that clients have choices around paying you. You can incentivise them by offering discounts. Where clients themselves are experiencing cashflow difficulties, you might consider negotiating periodic payments. If you are still having issues consider having a collections company take over some of your debtors.
5. Stay on top of your expenses
In this environment cash is king, so ensuring that you can maintain Cashflow and limit dipping into your overdraft or cash reserves is vital. If you haven’t already it would be sensible to tighten your business's purse strings and eliminate all non-essential spending. That might be in entertainment, office facilities (especially if not in use), parking/travel costs, etc.
Make sure you have a process for managing your expenses, which is also articulated to your team so they are aware of any changes to non-essential spending. Also having a clear budget for each expense line so you know where you can save costs is extremely important this Financial Year.
6. Be aware of deadlines
Missing deadlines can be catastrophic for businesses. It can prompt fines or mean that you can’t claim certain expenses. To make sure you don't miss the deadlines this financial year, Azure Group's Tax team have prepared Key Lodgment Due Dates Calendar - FY 2021 in PDF printable for your convenience.
We know how challenging these times are, but it doesn’t have to be devastating to your business. By setting goals and staying on top of the management of those goals you can still achieve success.
Have you noticed our #FridayExpertTips... here's one that relates to #Technology
“Be flexible and listen to the market: Even if you nail down the perfect niche, it won’t necessarily remain the same forever. Markets can be fickle. If you can’t pivot and react when the winds of change come, you’ll be blown away.”