With the cost-of-living crisis looming and the remnants of the pandemic still having an impact, now is an important time to think about the future of your business. Geraldine O’Connor outlines six areas to consider
For managers and business owners, the summer months can give you time to prepare your accounts, clients and staff, for the end of the year. Here are six critical areas to focus on before the autumn rush begins.
Inflation
Rising costs are on everyone’s mind – energy, supplies, transport, staff costs, or simply the cost of living. So, how do we manage the impact on our bottom line?
A critical step is to understand what you’re spending. Now is the time to analyse your costs, both to look for potential savings and to spot problems that, if left unattended, could mean that you run into serious trouble later in the year.
If do you think you may run into difficulty, keeping the lines of communication open with your bank is essential. Remember, your credit history will affect your future ability to raise finance, so address issues as soon as they are identified.
Budgeting will be more important than ever this year, and inflation needs to be factored in when you analyse and forecast your variable costs.
Time
Are you making the best use of your time? What do you spend most of your time on? Chances are you spend a lot of your time answering questions from clients and staff. Identify time-consuming tasks you can delegate to a staff member or outsource to a service provider.
Remember, any time you get back can be used to enhance your wellbeing and effectively manage your team and business. If you charge for your time, it’s important to quantify its worth.
Pressure
Consider whether there are things that can be done now that will take some of the pressure off later in the year.
For example, do you need to update job specifications? Are there ways to streamline processes and work more efficiently? What can you do now to prepare for forthcoming changes like the introduction of statutory sick pay, remote working and pensions auto-enrolment?
If you took advantage of debt warehousing during the COVID-19 pandemic, have you agreed on a payment plan with Revenue? If not, now is the time to do so. If you are a sole trader, check that you have the correct information for your tax return.
Pipeline
When was the last time you looked at your sales pipeline? What incomings do you expect next year, and how will inflation affect your input costs? Have any prospects fallen off your list? Can you identify new opportunities? The more realistic your projections, the better your forecasts will be.
Service providers
Are you getting what you need from your service providers? If not, why? Could it be that your provider doesn’t understand your requirements? Have you outgrown them?
If they don’t have the required skills, it is time to start looking for alternative solutions.
Systems
Work patterns changed during the pandemic, putting pressure on systems and resources in some areas and highlighting opportunities in others.
Do your systems highlight opportunities to improve cash flow, increase profit, flag risks, and produce meaningful reports to help you run your business more efficiently? If you aren’t getting value from your systems, now might be the time to seek advice and invest in some training.
We’ve come through a very disruptive period that accelerated the pace of change in many businesses and put pressure on resources. Soon, we’ll be facing a hectic time for business owners while finance teams will have filing deadlines and quarter- and year-ends on the horizon.
Now is the time to plan and position your business to move forward confidently in the months ahead.
Geraldine O’Connor is Senior Bookkeeper at GroForth