As we kick off a brand new financial year, it is a great time to take a step back and look at your financial plans for the year ahead. If you’re an SME and don’t have a huge team behind you then it can be a daunting challenge to decide where best to focus your efforts. We have put together a some business tips for the new financial fear to help you plan for the year ahead and also advise on where you might be able to work with trusted partners to help achieve your goals.
Review the year:
Reviewing your previous twelve months in business can help you to identify any areas that need improvement as you move into the 2021-22 tax year. Look at specific areas where spending was unexpectedly high, or sales were unexpectedly low and use this data to inform your strategy going forward. Can you make cost savings to better align your spending with your budget, or can you identify when the business needs more focus on marketing and sales tactics to drive an increase in sales based on historical data?
Forecast the next twelve months:
After you know where the business has been then it’s time to move on to where your business is heading for the year ahead. Understanding your trajectory will help you to inform almost all of your decisions that need to be made. Using tools such as cash flow forecasting and balance sheets, you will be able to identify, plan and prepare for financial lulls and determine if a cash injection is required. Your forecast will help you to set targets and budgets for the year ahead, as well as plan for larger capital expenditure projects within the business. You can find our tips for cash flow forecasting here.
Re-evaluate payment terms:
Taking some time to evaluate your credit control KPIs from the last twelve months might lead to the discovery that your payment terms are in need of adjustment to encourage faster payments from your clients. Now is a good time to look at your current procedures and terms and make any necessary changes. There are multiple strategies that can be implemented for payment terms, we took a look at some of the options here.
Explore your options for finance:
After conducting your financial planning for the next twelve months, you might have identified the need for some additional funds to bridge a gap in your finances. You will need to use your financial analysis as evidence when applying for forms of business finance so it is good practice to get these forecasts up to date and reviewed on a regular basis to ensure that they always show a true reflection of your business’s financial situation. There is such a wide range of business finance products available including asset finance, multiple types of loans and invoice finance. Our sister brand, My Invoice Finance is able to help you navigate the business finance landscape.
If you have spent the last twelve months in a never-ending cycle of chasing late or missed payments then you could look to outsource this aspect of your business to a trusted third party. Here at My Debt Recovery, our focus is to take the pressure off you and allow you to devote your time to doing what you do best, running your business, whilst we chase down payments. We use all of the tools at our disposal to ensure a smooth and efficient commercial debt recovery process, whilst working towards the best outcome for your business. We operate on a no collection, no fee basis and we will take on your case and aim to recover outstanding monies owed to your business, which can help bolster your financial position and cash flow immediately, once returned. Reach out to our team today, we’re ready and waiting to help.