As we speed towards the summer, the end of the tax year may seem a distant dot on the horizon. But a couple of months into the new one is the perfect time to check the health of your business, and doing this now will help ensure you are on the right track.
With the Federation of Small Business reporting record levels of business confidence for UK SMEs, it’s vital that owners understand the health of their business, so they can respond rapidly and advantage of the improving economic conditions.
Peter Trimm, Product Manager at Sage One Accounts, Newcastle, provides some tips on what business owners should be doing after the first few weeks of the new tax year.
Check progress against your business plan
Take a look at where you are against the targets and budgets you set at the beginning of the year. Bear in mind that it’s not enough to just develop targets at the beginning of the financial year and then ignore them from then on. Successful businesses of all sizes – from sole trader upwards – should be continuously checking their performance throughout the year. If you can make this a monthly habit you can quickly and easily spot potential problems, and react accordingly.
Understand your cash flow
Closely manage your cash flow by tracking who owes you money and who you owe money to. Are the same people who owed you money last year still proving troublesome? If so then work out now what you’re going to do to change this situation and make sure you avoid future late payments. Mitigate your financial risk by making sure you’re always aware of who you’re extending credit to, that your VAT return is up to date, and you’re in control of your costs.
Talk to the right people
Get realistic advice from your network and market demographic – not just the experts – as often as you can. Having reviewed your business performance for the year so far, identify any products or services that aren’t doing as well as you’d like, and then speak to their target audience directly. Tap into entrepreneurial communities online, where you can get inspiration and guidance – often the best way to learn about running your business is from those who’ve done it.
Have the right tools for the job
Take advantage of the vast number of business tools that can help you improve the efficiency and productivity of your firm. For example, if you’re constantly on the move then you need to look at ways to keep track of your business finances online, by using cloud-based software like our own Sage One Accounts and Payroll service and tools listed in this blog about ‘the Paperless Office’.
For more info, please visit Sage One Website or call 0845 111 66 11