Cannot wait for New Year’s Day? In the finance world, it is the day of April 1 that we look forward to.
From the financial point of view, this is the day that gives us the opportunity to review and evaluate the performance of the previous financial year and create a plan for the future of your business. One you must make sure is that you have the right accountant that is up to speed on your business and industry and is capable to give you the best financial advices. Let us look at some of the things your accountant should do for your business:
Take a look at other businesses in the same industry.
In order for you to improve faster than your competitors, you should know how they operate. Your accountant should be able to use his evaluation of your business’ performance (in comparison to your competitors) to look at areas you can improve on and at the same time, help you execute changes over a given time
Review you risk management.
Did you take a look at the factors that may affect your business? Consider reviewing your business’ insurance. Consider having a backup plan. Think about your people – if they get sick, become injured, or had personal problems – could this affect others in the business? Your accountant should help you identify factors that could affect your business and the factors that influence the individuals within the business.
Take time to review your revenue and margins with your accountant. These are two important factors that most business owners fail to look at. Your accountant should help you identify areas where you might be spending too much or areas you might have the capacity to save.
Check your pricing.
Setting the right price on a product or service can make or break you. Too high and you’ll price yourself out of the game; too low and your profitability is hit. There is a major difference between getting the business in the door and making a profit based on revenue. If your margins are too low or your pricing is not putting your head above water, then you may as well not be in the game.
Set your budget
It is very important that you plan your expenses. You do not want your profits to turn into losses. You should be able to budget for the future.
Plan for succession.
Think about long term. Think about exiting or selling out your business. You must be ready for these. This is again where your financial adviser should come in. They must analyse small business tax concessions, contributions to superannuation, tax minimisation strategies, fair and reasonable business valuations, cost bases and estate planning.