We’re just over half way through the financial year, so maybe it’s time for a “Business MOT”. You make sure your car is fit to get you through the year, so why not do the same with your company? Here are the main areas that should be reviewed to make sure you are hitting your targets:
1. Reconcile your accounts
Having an accurate view of your financials is always a good place to start if you want to improve your business. It doesn’t hurt to go through any sales receipts and invoices you have, and check your bank account to make sure the figures add up.
Quality accounting software will make this easy for you – in fact it will do most of the work automatically. It will also enable you to quickly see the big picture for your business and gauge whether you’re reaching your goals.
2. Talk to your accountant or bookkeeper
One good reason for making sure your accounts are reconciled is so that you can pass them to your accountant or bookkeeper for checking.
Some accountants or bookkeepers might not want to look at the detailed figures until nearer the end of the financial year. But if you can persuade them to take a quick look now, they may be able to give you a rough idea of what your tax bill will be.
It’s good to have that knowledge sooner rather than later. That way you can ensure you save the right amount of money, avoiding any unpleasant surprises.
3. Review your business year so far
Take some time to reflect on the year and ask yourself some important questions:
Did your business grow?
Is your business thriving?
How did your revenues and profits compare with the previous year?
Plot sales graphs in your accounting software. Is the trend going up?
Look into expenditure over the past 12 months. Any concerns?
If you made a list of goals last year, did you achieve them?
In short, try to understand how your business has changed since the start of the year. If it’s grown, give yourself a pat on the back – and keep going.
If it hasn’t grown, ask yourself why, and dig into the figures to find out more. Now might be a good time to get professional advice from an accountant, bookkeeper or business advisor. This will help you stay on track for the rest of the year.
4. Stay up to date with tax law
Tax laws and codes change on a regular basis. Talk to your accountant to make sure you’re up to date, and understand how any changes affect your business.
Be sure to update your internal systems too, such as online payroll. With the right software this will be easy to do.
5. Confirm important filing deadlines
Talk to your accountant or financial advisor and make sure you know when to file and pay. For example, if you have to pay quarterly, set up your calendar with the appropriate alerts and reminders for the coming year.
Having an accurate view of your financials is always a good place to start if you want to improve your business.
6. Update your payroll
Mid-year is a good time to revisit payroll. Items to consider include:
Handing out bonuses
Check local legislation – you can probably do this now instead of waiting for the end of the tax year. It might help your tax accounting to do it sooner rather than later.
Setting up direct payments
Get your employees on direct deposit payment schemes to save everyone time, money and resources.
Reviewing employee status
Make sure you know the difference between an employee and a contractor or consultant. Check the status of all your employees. If you get this wrong it will cost you money – you may be penalised by the government.
Distributing pay records
In most countries you have to keep accurate records of employment, including hours worked and wages paid. Legally, you may not have to supply this information to your employees, but it can be helpful to do so. They may need it one day, such as when they apply for a loan to buy a house.
Making pension or superannuation payments
There’s still time before the end of the tax year. Use it to think about whether you want to pay more money into your own pension or superannuation scheme. Review the schemes you’ve set up for your employees too, and check they’re still appropriate.
Read our payroll guides for more useful information on this topic.
7. Revisit your accounting software
When you’re busy with the day-to-day of running your business, it’s hard to think about upgrading or changing your accounting software. So choose a quiet period of the year to consider doing this.
If you’re still using desktop software or Excel, think about the benefits of moving to online or cloud accounting. Cloud accounting software lets you access your business accounts online from anywhere at any time, using a laptop, tablet or smartphone.
You’ll also reduce your IT costs, because all the software maintenance and upgrades are handled for you. And it’s secure, with powerful encryption and remote backups. So there’s less chance of your vital business information being lost or stolen.
Do your research, find out which accounting software might be suitable, then try it out. Most have free trials so that you can see whether the product is right for you and your business.
8. Look at the big picture
If you end up with some extra time on your hands, try to use some of it to relax. It’s important to wind down and give yourself a break from work. Taking time off to spend with family and friends will help you recharge, ready for the rest of the year.
This quiet period can also help you get a broader perspective on your business. When you’re not concentrating on day-to-day tasks, you’re free to think outside the box. Some of the best business development ideas occur when people are relaxed and enjoying other things.
So kick back, relax and switch out of work mode for a while. You and your business will benefit.
9. List your goals for the rest of the year
If you want to improve your business, make a short list of your business goals. See if you are on track with reaching them – and if you need to revise them at all. These goals might be about sales target or revenue figures, opening new stores, taking on more staff, or simply improving business relationships with existing clients.
Try to combine ambition with realism and give yourself some goals that you know you can achieve if you try. Work towards these and check them each month to remind yourself where you’re going.
10. Keep your accounts in mind
A well-run business has well-managed accounts. With the right financial tools you’ll know the financial health of your business at all times. This will help you make the right decisions – not just daily decisions, but long-term strategic ones too.
So if you only make one business mid-year resolution, make one that counts. Resolve to improve your business by managing your accounts well and planning your business finances carefully.
Get help from an accountant, bookkeeper or financial advisor if you need to, so you can map out a financial plan. And use whatever tools you need to help you keep a close eye on the money flowing into and out of your business.
If you can stick to this routine it will be much easier to improve your business and keep it on track year to year. At Abacus we are always happy to talk business and advise on matters such as this, and we offer FREE, no obligation consultations – call now on 01376343535 or e-mail us on email@example.com