With the end of another financial and tax year coming up fast, now is a great time to get all your affairs in order to start next year off fresh and prepared. Here are some helpful tips to navigate the end of the financial year:
- Study Your Efficiencies
Business success is more than the bottom-line profit of the business. A business with clear and defined performance indicators will nearly always excel, especially when compared to a business riddled with value inefficiencies. Take a detailed look into what your business does well, what it doesn’t do well in, and how improvements can be made.
Efficiency isn’t always calculated in monetary terms. Instead of seeing profit as the be-all-and-end-all of efficiency, look at factors like time, communication and teamwork. Taking care of issues in communication will translate into value for your business.
- Don’t Cut Costs In Isolation
Remember there are potential flow-on effects from your decisions. A sure way to fail is to cut expenses just to increase profit without considering what will happen further down the business chain.
For example, removing admin staff will decrease your salary expense, withholding and superannuation, but can lead to your ‘billable’ staff spending more time on admin, and less time producing revenue. The effect here is less income coming in, in return for a slightly reduced expense.
- Budget, Budget, Budget
Businesses who plan and implement a budget are far more likely to succeed. A budget is more than a restraint on your spending. You need to study your business, your environment, and your team when planning for the next financial year.
Budgets not only estimate where your business is heading, but it is also your best troubleshooting tool. If your business starts struggling, look at your budget and compare it to what is coming into and out of your business. Large variances in expenses or income need to then be further examined to determine the reason for the blowout. Once you identify the issue, you can then work on a solution.