Spring Clean your Finances
Top pointers for a spring spruce up for your small business finances
Spring cleaning isn't just for your home - it's also a great time to clean up your company's finances. Here are a few tips to help you get started:
1. Review Your Budget
Spring is a great time to review your budget and make any necessary adjustments to help you ensure that you're on track to meet your financial goals. Dust down those spreadsheets (metaphorically speaking of course, don’t go battering your laptop) and check in with your bank statements. Create a ‘budget vs actual’ spreadsheet to go alongside your year’s budget,. Break it down into months or even weeks, if you receive payments weekly, and see how your actual income and expenditure compare: are you spending more than you expected, and if so, why? Are you earning less than you estimated, and if so why? Or maybe you managed to seal a great new deal and your income is doubling or tripling and you need to adjust your end of year figures. This exercise will help you to reconfigure your plans for the rest of the year.
Once you’ve checked how your business is performing against budget, make sure you update all those other items - file the till receipts, make sure your records are up to date, check that you have all the right contact details for your customers or clients, purge data you don’t need (GDPR), get your filing up to date and straight, especially electronic filing. Do you have a filing tree (DM us on our socials if you’d like us to help you with one of those!)? Follow that and keep it neat.
And, of course, the catch up and tidy up will be of great benefit when it comes to those end of year tax returns.
2. Track Your Expenses
Once you've reviewed your budget, take some time to track your expenses. This will help you identify areas where you can cut costs. No-one can afford to waste money, so check out what you are spending your money on - did you need that coloured card from that outlet when you can get it half price at a different one? Are you getting the best value from your internet service provider or your utlities supplier? What works to help save money in the home, also work in your business?
And don’t forget the bank. A good relationship with a bank puts your business in a good position. But how do the fees for your business bank account compare with alternative banks? What is the cost of your borrowing compared to what else is available on the market? Spring is a good time to review these and then, if you are going to make changes, you have the rest of the year to make them and settle down with a new relationship before you start to plan ahead for next year.
3. Update Your Financial Statements
Your financial statements are an important tool for tracking your company's financial health. Make sure that your statements are up to date and accurate. This ties in with your budget vs actuals exercise; if your figures are now correct and up to date, make sure you have your financial statements up dated and accessible too. These give you an instant picture of your current financial position. Have this to hand at all times. Paper is still a valuable tool - print it off and pop it on the wall in front of your console so you can refer to it at a glance. It can be both sobering and exhilarating. It will remind you of how far you need to go, and of how far you have come.
4. Review Your Insurance Coverage
Spring is a good time to review your insurance coverage and make sure that you're adequately protected.
This is a really important item in any business. As your business changes and grows, your insurance cover needs will change. Maybe you take on someone to help. Even if only part time, an employer must have employer liability insurance, for example. As you work your way through your business finances and spruce them up, check in on your insurance cover and see whether you need to make any changes. Even if this means an additional expense with a more expensive premium, having adequate cover pays off in the long run.
5. Get Help From a Professional
If you're not sure how to spring clean your business finances, consider getting. A good bookkeeper can help you get all your financial records neat, tidy, in good order and most importantly, accurate. An experienced business or financial advisor can also help you create a budget, track your expenses, and make sure that you're on track to meet your financial goals.
This is where Athena Services Ltd’s bookkeeping and business support service can step in. Whether you need just one-off assistance to get your business spruces up and ready for the rest of the year, or whether you want regular support, we can help. Reach out to us and we’ll schedule an online chat - no obligations, just a friendly discussion and you might just want to set up a working relationship with us!
It helps to have a helping hand - our business support services help you along the road to success