Spring is in the air, and it’s a great opportunity to clear out the old and make way for the new. Here’s how to get on top of your finances.
There are so many benefits to a good spring clean. Nothing helps you feel quite so in control as getting on top of your finances.
Over the years, we’ve come across all sorts of businesses who could benefit from a spring clean.
We’ve had clients who keep random receipts in shoe boxes. We’ve also had clients who’ve been so busy juggling various hats that they’ve missed two years of VAT deadlines!
Luckily, at Fresh Clarity we’ve always loved a challenge. But if you’re feeling inspired to get on top of your paperwork this Spring, read our seven top tips to give your finances a much-needed spring clean.
1. Audit all your systems
It’s all too easy to keep running things the same way because that’s how it’s always been done. But how much time and money could you be losing if your systems and processes aren’t fit for purpose?
With technology moving at such a rapid pace, the systems you invest in need to be as future-proof as possible.
That’s why it’s important for business owners to regularly audit their systems to make sure everything’s working efficiently.
2. Document how you do things
Even if you’re currently doing everything on your own, it’s important to document how you do things. Avoid the temptation to keep everything in your head.
Once you grow and start to employ people, you won’t want to spend all your time explaining every last process.
It also means that if you’re absent from your business, staff can pick things up while you’re gone. And if you ever choose to sell your business, it makes it a much more attractive prospect to investors.
3. Tackle that paperwork
There’s nothing worse as a business owner than getting unexpected bills or experiencing cash flow problems you weren’t anticipating.
If your paperwork is a mess, you don’t invoice your customers in a timely way and you forget to pay suppliers, it can cause unnecessary problems.
Tackling your paperwork and bookkeeping puts you in a better position to spot issues and avoid nasty surprises.
4. Review your customers
From a financial perspective, it’s useful to regularly review your customer base. You can do this by ‘risk profiling’ any customers you’re offering credit terms to, and monitoring late payers.
If you’re not on top of your bookkeeping, you’re potentially allowing these customers to pay late.
Equally, if you’re not enforcing your own credit terms, you’re enabling them to treat you like a bank.
Regularly review your late-paying customers and make sure they understand your payment terms. Bringing in software that automates credit chasing will also help you keep your cash flow robust.
5. Outsource your bookkeeping
Business owners often try to do everything themselves. But wearing so many different hats can be distracting – not to mention exhausting!
We often find that when business owners do things they don’t enjoy or understand, essential processes get confused or delayed.
Common issues include expenses being recorded incorrectly or being missed altogether, and software not being used effectively.
Investing in outside expertise frees up your time to concentrate on what you do best, and gives you peace of mind that your books are fully accurate, compliant and up to date.
6. Get your payroll right
If you currently employ people, it’s essential to get your payroll right. If you make errors with your team’s salary, you’ll have unhappy staff. This will invariably have a negative impact on your business.
There are countless variables to factor in – like applying tax code changes, recording statutory payments correctly and calculating holidays properly.
Outsourcing your payroll to specialists like Fresh Clarity removes that pressure, and ensures your regular payroll run is completed correctly.
7. Pick the right software
We’re sure you’ve heard about MTD, and hopefully – if your turnover is above the VAT threshold – you’re ready for the switchover.
But if you’re not, it’s a good opportunity to review your current systems and processes to decide which software is right for you.
Avoid the temptation to buy the first MTD-compliant software package you see, just to tick the box. By doing that, you could end up wasting time and money implementing something that doesn’t support your business.
For more tailored support or to get help with any of the items above, book a free discovery call with us today.