Are you headed in the right direction?
In a few months time the financial year will end, and a new one will begin. I am excited, read my blog here about why I’m excited! I know most people don’t get excited or worry about this, but it is very important for Small Business owners. It is a fresh start each year to achieve your business goals, and reassess your business direction. How are you travelling now? During the months of April, May and June I often review clients financials and give them some guidance of things they can do to improve the outcome of their returns, and report back on how their business is travelling. Today I thought I’d share a few things that I would discuss with clients. 1. Reading your Profit & Loss. This is often one of the hardest things business owners need to do. I get it. Financial Statements are hard. And when they aren’t explained in easy to understand terms it’s like a different language. Keep it simple. Look at your monthly income or turnover. Has it increased month by month? Maybe you had a slow month, review what happened, and what changed in the next month. 2. Review your expenses. This is a continuation of point one, but needs its own point as well! Compare your expenses to last years. Most financial statements have comparative amounts on there. Or pull out last years reports and compare it manually. What have you spent your money on this year? Which expenses have gone up? Which expenses have you reduced? Reviewing your expenses on your profit and loss is a great tool to smooth out your cash flow, and tighten where needed. 3. Spend some money. I understand this is not always an option. I always encourage it if cash flow allows, as it could save you tax dollars later on. After reviewing your expenses you may notice your net profit (Income less expenses) has increased. That’s great, your business is growing and succeeding. This means you are making money, and this also means you will be paying tax. Have a look at expenses you could spend money on between now and the end of June. The most common ones are new equipment, conferences, training, uniforms, and Superannuation. 4. Talk to your accountant. This is the part where I say you must talk to your accountant about your business performance. No, you don’t have to unless you want to. Having an accountant you feel comfortable talking to and discussing these things is important. I don’t mind if you go see someone else, just as long you are comfortable with them, and you feel you are receiving the service you need. If you aren’t sure and would like another choice get in touch. I’d love to meet with you are discuss your business, free of charge and obligation.