Published on the 09/07/2015 | Written by Vendor - media release
The new financial year gives small- and medium-sized businesses (SMBs) the chance to review their performance and identify areas for improvement…
Peter Nicol, director at mid-tier accounting firm RSM Bird Cameron, said, “There are some things SMBs should keep in mind to ensure their success in the new financial year, such as retaining reliable cash flow oversight and implementing sound financial processes.”
The company offers suggests five tips to help SMBs improve their financial position and ensure a successful new fiscal year.
1. Cloud if you can
Cloud accounting software helps SMBs become more efficient. It gives businesses powerful online tools at a fraction of the cost of enterprise-grade accounting platforms.
Nicol said, “Businesses need to make sure the available internet infrastructure supports reliable cloud services. Depending on your location, cloud might not be ideal. However, if broadband access is no problem, it can give you a big boost without major up-front costs.”
2. Keep in touch with your advisor
The only real way SMB owners can know all their financial options is by meeting regularly with their business advisors. This can help business owners keep up with the latest trends, regulations and opportunities that could affect their businesses. “Catch up at least every quarter. It’s important to bounce ideas around and discuss ways you can improve your business,” said Nicol.
3. Create a cash flow budget
A cash flow budget is essential for a successful business. “If you know your cash situation, then you can accurately forecast, understand your immediate break-even point and be in a better position to make educated decisions on new business opportunities,” noted Nicol.
4. Follow up debtors
While most customers can be expected to honour their debts, business owners should not be scared to have a conversation with debtors behind on payments. Said Nicol: “Business owners worry they will offend their debtors [but] timely debt payment is a healthy part of the customer-supplier relationship. It is important to develop the skills for these conversations and have systems in place that provide the necessary reports so you can chase non-payers.”
5. Have a plan to increase profits
Increase profits by reducing costs or increasing the customer-base. “Collectively, even small changes can lead to increased profits. Reviewing the business plan with your advisor can help you make these changes and put you on the path to future success,” Nicol concluded.