The Christmas break gave you a chance to stop and slow down. But it was also a great opportunity to think over where you want your business to head before the end of the financial year.
It might be that you want to grow your customer base or perhaps you want to increase your team, either way the result is the same – change.
Change can be a great thing for business, but the knock-on effect for actually running the business and more importantly in doing the bookkeeping can be more than you can take.
Things Get Busy
The reality is that when the business year starts back, you make the moves to bring in someone new or perhaps increase your marketing and you get busy, seriously busy. Before you know it, it’s almost the end of the financial year and your bookkeeping is looking less that cheerful!
There is a Better Option
Now that Summer is over and you’ve settled back into work, it’s time to look for ways to set your targets, improve your workflow and get your books back on track. Do this before tax time is on the horizon and you’ll save yourself financially, emotionally and mentally.
Let’s face it, bookkeeping and accounting can be tough for people who are perhaps more focused on getting work done.
It’s About Building a Foundation
The fact is that when you don’t have your business setup to support growth and change, the likelihood of going under increases. When business’ get busy the first thing that can fall by the wayside is invoicing and bookkeeping.
Even though you know that invoices have to be sent, chances are it’s at the bottom of the to-do list and done ‘when you have a chance’, which is often late at night.
The point is that the cornerstone of your financial success is bookkeeping.
Yes, you heard me: bookkeeping.
Ask yourself how your financial goals are going. If you are smashing it, have a great day you obviously have everything under control. But if you don’t know or maybe they’re looking lousy it’s time to open your eyes to what else it out there.
Do it Yourself Bookkeeping
Despite the wonders of cloud-based business programs that provide almost instant benefits including job allocation and costing, invoicing, capturing receipts and financial reporting, it’s the latter that is often overlooked by tradies.
Sadly, it’s likely to mean cashflow is terrible. It’s a common scene, particularly at BAS time, when another large unexpected amount to pay arrives. In the end, the only reason they know what they owe the ATO is because of the constant reminders in the mail. But here’s the thing, if you don’t know how to produce the reports, how to decipher them and how to make business decisions from them, how do you know if your business is performing as it should?
The Big Impact
Poor bookkeeping impacts your business in many ways:
- You might not know if you’re running a profitable or sustainable
- You have very little control over your cash flow
- Financing options are reduced for future growth
- Your existing financial situation (business loans) could be at risk
- Your employees might not get paid
- You might not be paid (how is your weekend looking now?)
- You can’t plan for the future
If you do not know where you are right now, how can you possibly plan for where you want to be?
Measured improvement requires, at the very least, that you know and understand your baseline. To supercharge your results, you will need to know your performance indicators which gives you with the ability to compare your business to other industry benchmarks and see how you’re performing.
Finish Off Strong
The good news is that it is not too late to come home strong this financial year.
If your bookkeeping is in poor health, (or even if you’re not sure) it’s time to get it sorted.
Not later, now.
And then when you’re ready, talk to an accountant to really set your business into high gear.
In my experience, once you start making money, you are going to start complaining about paying taxes. Well-considered, comprehensive tax minimisation starts well before the problem arises.
Just think about a few of these questions to work out whether talking to a bookkeeper could be a good option:
- Do you know where your business is at financially right now?
- If I asked whether you have the money to purchase much needed
materials, would you know if you do?
- Do you have the money in your account right now to pay your
- Will you be receiving a wage this week?
- Where do you want to see your business in 3 months?
- In 6 months?
- In 2 years?
Until next time… Troy
Troy Wink is the driver behind Newcastle Bookkeeping Plus. He is committed to helping small to medium business clients increase their revenue and profits by getting their bookkeeping right. Connect with him on LinkedIn