Liz Fleming – Getting Ready for end of year. Plan early, Be ready

GETTING READY

For end of year PLAN EARLY, BE READY

with Liz Fleming The Efficiency Coach

As we move into the winter months in the southern hemisphere, for us accountants and those in the business world, it also means that it is fast approaching to the end of the financial year, which is usually 30 June. Some might say it’s the favourite day for accountants – and for some, it is, but others (like me), it’s actually the work performed in the lead up to this day that is the most exciting part - developing budgets, planning and strategizing for the future while reviewing your past performance, to ensure a sustainable business model.

It may be the one time of the year that you meet with your accountant to review the annual performance for income tax purposes, but sometimes this can be too late, as the opportunity to make decisions may have passed and your level of understanding of your business’ profitability may not be as you expected. We don’t want to be just relying on whether we have sufficient cash to pay our expenses at the time they are due, proper cash management and forecasting should be included in your forward planning processes.

Know your numbers, check them regularly

To run a successful business it is important to know your numbers, that includes financials, marketing, sales, customers, products and profitability. If you have a finance system like Xero, then this has been made super easy for everyone, no accounting skills required. Xero has been designed for the small business, so its functionality serves the purpose of being simple, easy and straightforward for the small business owner to know exactly where they are at, in real time. Developing budgets and metrics, that you may call targets or KPI”s (key performance indicators) is a vital step to managing your business performance. If you do not have anything to check against, then it is a bit like the blind leading the blind, having no reference point to monitor against.

Invest in yourself and your business

I believe small businesses that invest in themselves and their business are better equipped to make better decisions. More often they can take a more structured approach to decision making, with better information and more resources and knowledge at their fingertips. It is important to see expenditure in your business as an investment in your business and always think about the ROI – return on investment – what is the potential that this investment (of money, time or resources) could bring to my business? Sometimes this ROI is hard to define or predict, so there is always a risk (like with most things we do in life), but normally if there is a risk associated, there is also the opportunity for a reward! Just think about that for a moment, if this wasn’t the case, NOBODY would even be in business.

Plan early, be ready.

How is your strategy document looking? Do you even have one? Do you need to dust off that business plan you completed last year and haven’t really given it a second glance since it was signed off? This is what I mean by reviewing your past performance – what did you say you were going to do and comparing it to what did you actually end up doing. It is exactly the same when it comes to budgets – regularly reviewing your monthly profit and loss against your budget is a good indicator of how you are tracking against what you thought. Now don’t get me wrong, budgets in themselves are full of flaws – we create a budget, looking 12 months in advance, based on our best guess at the time, while a number of factors can influence the performance of your business HOWEVER we do need to be tracking against something, rather than nothing, so a budget is the best tool to be one of the key financial reports for your business.

Fail to plan, plan to fail.

The old cliché, but it is so ever important, especially after the last few years we’ve had. We do need to make sure we have a Plan A, Plan B and even Plan C (or as many extra plans as you may need). Think of each plan as a different set of scenarios, tweaking certain drivers within your business that may lead to a different result. We are forecasting what we believe may happen when we make certain decisions in our business.

Now is the time to look to the future and the next financial year and work out what you may do differently within your business, what are your aspirational goals and how you are going to achieve them. Think about what plan you need to implement to make sure these goals are met and where do you need to prioritise your time, money and resources. How will you invest in yourself and your business, this may include the engagement of a business mentor or coach that can be there to support and guide you through your business journey, by being your accountability buddy to keep you on track and drive performance throughout the year.

Remember to plan, engage, review, monitor for success, every single month of the year.

Get in touch if you want to plan for success for your next financial year.

Liz Fleming The Efficiency Coach is a business mentor and accountant based in Traralgon in Gippsland. Liz is passionate about supporting small businesses to thrive, by utilising her skills and experience to develop processes, systems and strategies for small businesses to become more efficient. You know how there are never enough hours in the day and you don’t know where to start, Liz will show you how to maximise your time and discover who is best to do what and when. Her promise is more profit, more time and more fulfilment. Liz is a Chartered Accountant with a Masters in Forensic Accounting, with more than 15 years of finance experience across various industries (including government) and has called Gippsland home for the past 5 years.

She works with small business across a number of industries including primary producers, artisan producers, retailers, services, tradies, helping them to thrive in their business. Please get in touch if you want to work with Liz in 2022.

@lizfleming_theefficiencycoach