How to spring clean your business finances
With Self Assessment tax returns out of the way and summer right around the corner, spring is an ideal time to take a closer look at your business finances.
Whether you’re a small business owner or landlord, it can be all too easy to take your eye off your finances when you’re focusing on delivering the best possible service for customers.
Spruce up your business finances for spring
With a little expert advice and few minor tweaks, you could optimise your finances and make the most of the year ahead. Here are some ideas to help get you started:
Cost audit
A cost audit can help you figure out whether all your processes are running effectively. Focus on the following areas:
- Sales
- Production
- Management
- Internal processes
Make sure your financial record-keeping processes are sufficiently comprehensive, with all sales receipts, invoices, bank statements and cancellation notices logged accurately and quickly.
Check that you’re properly protected against fraud and theft. And, compare both your costs and sales internal records to those logged externally to find out whether everything adds up.
Efficiency savings
You might identify potential efficiency savings in your audit. But, here are some other options for you to consider:
- Use technology to speed up processes and save on communications costs.
- Reconsider your office space; think about downsizing, or sharing amenities with another company.
- Double-check your personal and staff expenses to see whether any outgoings can be reduced.
- Work out which customers are most valuable and target resources at their demographic.
- Streamline deadlines where possible to encourage more efficient working patterns.
- Communicate with clients via phone or video call wherever possible.
Chances are you won’t be able to implement all of these. However, any could help you make significant savings.
Supplier arrangements
Among the biggest efficiency savings you could make come from supplier arrangements.
Adopt a constructive tone and be prepared to compromise, but go in knowing what you want and make sure you have some leverage (e.g. a new potential supplier).
Most importantly, get your facts straight before you commence notifications. You need to know:
- The market rate for the service
- The value of any additional incentives
- Any warranty or renewal period details
- Their liability in case of non-delivery of agreed service
- The factors that make you a valuable customer
Price rises
Nothing stays the same forever – and that applies to your prices too.
Over time, inflation will drive up the value of products and services. Couple this with your ever-growing entrepreneurial expertise, and you quickly have an argument for increasing your rates.
Not only should this help you gain more value from existing customers, but it will also set a higher benchmark for any new customers you may take on.
Enter into negotiations in a friendly and constructive way. Set out the value you’ve already provided for your customer, and help them see how your service fits with the future of their business.
Fine-tuning your business finances doesn’t need to be difficult when you’re getting the right advice. Try out these handy tips, or call on a specialist accountant for a comprehensive run through of the steps you should be taking.
