For many businesses – particularly those in the service industries – things can go a little quiet during the summer.
While the children are off school and many staff are choosing to take their annual leave, the warmer months are ideal for taking stock of your company’s fiscal position and clean up any areas of financial concern.
Without the endless array of meetings, project deadlines and other commitments to worry about (at least for a few weeks), you can find out what’s working within your organisation; identify any gaps or weak processes in your systems; and remove unwanted expenditure so you can move into the latter part of the year knowing your finances are in better shape than ever before.
In this article, we’ve provided a series of tips on how to review your accounts during what is traditionally a slower period for many.
Go through your accounts receivables with a fine toothcomb
As a business owner, one of your biggest priorities must be to ensure there’s enough cash within your firm to keep your finances afloat. Even if you have an accounts receivables team working to send and chase customer bills, certain payments can slip through the net, leading to outstanding invoices that will inevitably affect your cash flow.
Now is a fantastic time to check your past receivables to see who still owes you money and send out firm reminders to customers who are dragging their heels. If you find yourself chasing regular offenders, consider contacting them directly to see what the issue is, and whether you can introduce new terms that work better for both parties.
Audit your expenses
Similarly, you should set aside a few hours in your schedule to audit your expenditure. Unused subscriptions can often go unnoticed; be sure to cancel any agreements that you no longer want or need. There are plenty of apps out there that can help you track and trim down your subscriptions by monitoring the recurring payments that are coming out of your bank account and flagging up any unnecessary outgoings. Truebill, Trim and Bobby are some of the tools our clients use on a regular basis.
Address your pricing structures
Raising prices is rarely a straightforward exercise – but every company will need to adjust its fees periodically, particularly when we consider the rate at which operational costs are increasing. If it’s been a while since you changed your pricing strategy, spend some time considering whether you are underselling some (or all) of your products or services, based on market demand and your competitors’ like-for-like charges.
Review your contracts
Perhaps an initial trial period has ended, and you’re now paying full price for a product or service that could be sourced elsewhere for less. Maybe you have a long-standing relationship with a supplier who could offer you a better deal, if you were just willing to negotiate. Look over all your current agreements to see if there are any opportunities for cash savings; sometimes all it takes is a friendly conversation to shave a significant amount off your outgoings every month.
Get on top of your paperwork
Though many of our financial processes are digitised, it’s still important to store and record any paper-based invoices, receipts, or other essential documents. If you have a large pile of files that needs to be sorted, get to work! You can either organise your paperwork in a secure location or scan your documents into your accounting software, so your accountant has all the information they need when it’s time to complete your tax returns.
Find ways to streamline your operations
We are all guilty of neglecting to review our systems and processes. But could you and your teams be working more efficiently if you were supported by more robust technologies? From online inventory management tools to CRMs with built-in automation features, there are plenty of apps out there that can do much of the heavy lifting for you (and help you spot further opportunities for growth).
Review your marketing success
Marketing budgets are often the first to be cut when money is tight – but to maintain a strong, secure industry presence, you must be using the right channels to reach your target audiences. The question is, are you spending money on the right approaches, or could you be getting a better return on your investment? Catch up with your internal marketing team or your third-party marketing agency for an update on your progress so far this year, and ask for their recommendations on areas where your budget can be increased or decreased for more effective results.
Make sure your accounting software is up to date
Platforms like Xero, Intuit Quickbooks and Freshbooks update their software all the time, so you will need to check that your finance teams can access the latest features.
It’s also worth assessing whether your current accounting tool offers the functionality you need to run your accounts department more efficiently, or, on the other hand, whether you could try a more simplified version of your preferred tool to streamline your system and save some money on your monthly or yearly subscription. In some cases, it might make sense to switch providers entirely.
If you require assistance with any of the above, please contact us. Whether you need one-off financial consultancy or would benefit from our part-time finance director services, our team is always here to provide affordable financial solutions for forward-thinking businesses.