With just a couple of months left of 2021, now is the perfect time for business owners to reflect on the year past. It’s been a tumultuous couple of years for businesses, all of which have been forced to adapt to operating in a global pandemic. The year ahead
brings much to look forward to, as businesses move towards a new normal.
When looking back and analysing your business’s performance, it’s important to think about areas you could be doing better for the year ahead. Efficient financial management is key to business success, so you’ll want to make sure you’re organised when moving into 2022.
1. Find the best bank account for your business
For new businesses, setting up a bank account is important. For existing businesses, ensuring your bank is still offering the best deal is also crucial! Having an organised bank account will help you to keep an eye on cash flow and save you time when you need to file your annual tax returns.
With so many providers out there, it can often feel overwhelming trying to find the best one. To speed this process up, you can compare bank accounts from one platform to find the best provider for your business.
Each bank provider offers unique benefits that you might want to consider. Make sure you check all aspects of the account, including set up fees, overdraft facilities and features like invoice management.
A note of caution: if you receive invoices from vendors or suppliers for payments, then ensure that they are thoroughly scrutinized before approving any payments. With the rise in technological versatility, also comes the risk of cyber attacks and fraudsters attempting to steal from you. Companies like Abnormal Security, that can help prevent invoice payment fraud, could be sought to implement the necessary steps in preventing such fraudulent acts for your business.
2. Separate personal and business finances
There are over 3.2 million sole proprietorships operating in the UK. For sole traders, it is not a legal requirement to open a separate business bank account for income and expenditure. However, if you haven’t done so already, it’s important that you consider opening up a new account for business purposes.
By keeping your finances separated, you will be able to efficiently manage client payments, and ensure all taxable allowances are accurately accounted for.
3. Invest in accounting software
In order to track your business’s finances effectively, you should use accounting software like Xero. These solutions help you to gauge how your business is performing financially, and give you a clearer picture of where money is moving through your business.
Featuring categorisation and cloud access, accounting software can help manage bills and ensure you make payments on time. As this software is in the cloud, you can usually access it from anywhere on the go.
4. Consider alternative finance
If your business has suffered periods of low cash flow over the year, take time to work out why this was the case. Are seasonal trends to blame? If so, you can plan for the year ahead by mitigating quieter months with short-term finance solutions.
Small amounts of funding can be accessed without requiring risky collateral to be put forward as security. This could be a good option if you need cash to tide you through, and you’re sure that business will pick up again shortly after, letting you easily make repayments.
5. Outsource tasks
Outsourcing work has become increasingly popular since the pandemic, with more and more businesses choosing to hire contractors for temporary jobs. Outsourcing can help your business save more money long term, with contractors often operating at significantly lower costs when compared to the hiring and responsibilities that come with full-time employees.
What’s more, if there are jobs that are taking you a considerable amount of time, you may find that it’s cheaper to pay someone else to do the job for you. This may seem counterintuitive for saving money, but you have to work out the value of your time. However, hiring a reliable outsourcing firm can be very important as you would be handing them over a specific work portion of your business and you don’t want that to be done improperly. Looking for reputed firms such as Peak Support and others like it may help you out in the outsourcing sphere. Additionally, you may find that outsourcing works out cheaper in the long run.
A final note
As a business owner, it’s easy to fall into the habit of being involved in every aspect of your business. Sometimes however, this can result in you being spread too thin. Look at areas you can outsource, delegate and manage more efficiently with automation. Your business’s finances will thank you for it in the long run!Infographic created by Clover Network – pos systems