How should your business prepare for the new financial year?

May 24th, 2016


It may be hard to believe, but the end of the financial year is already approaching us again. The weeks leading up to July 1 can be a hectic time for Australian small businesses, with many racing to get their financials in order to meet their taxation responsibilities.

Perhaps your company is one of those for whom the approaching end-of-year is a source of anxiety. Although it's understandable to be feeling some pressure, it's not like the date has been sprung on small business owners - it's the same every year after all! 

With that in mind, putting in place a system to better prepare yourself - not just for the close of the year, but all regular deadlines - is smart business strategy. Why not make this year the time when the impending transition is a time of optimism and potential, rather than one of stress? To help you get started, we've put together the following tips to help you get through the end of the financial year with as little drama as possible.

Debtor finance can help to make the next financial year better.
Debtor finance can help to make the next financial year better.

1. Review your business systems

Just like at the end of the calendar year, in the lead-up to July 1 it can be a good reminder to take a look at the way your organisation operates, and think about ways you could improve in the next 12 months. 

According to Statistics Brain, the number two most common New Year's resolution is "get organised," a sentiment that can certainly be applied to may Australian businesses. The differences a better system can make when deadlines come is something Jennifer Moltisanti, assistant commissioner with the Australian Taxation Office (ATO), regards very highly.

"The benefits of implementing effective business systems and maintaining thorough financial records from the start of a new financial year are numerous and will save Australian businesses considerable time, energy and money," she says.

The end of the financial year can be a hectic time for Australian small businesses.

"An ATO review of business activity statements which were adjusted as a result of audits revealed that over 80% of adjustments were as a result of unintentional GST errors. Many of these may have been avoided with appropriate systems in place."

2. Update your strategic plan

To be successful and achieve growth, it's safe to assume your business will need some element of planning. While you're working hard to tie up all the loose ends on the current year, try thinking about how you would like things to be different in the next, and how you can make that happen.

No company becomes a success without making a few mistakes along the way, so take stock of the things you could have done better and discuss how those issues will be addressed going forward. You may even consider implementing performance reviews of your employees into your strategising, to get some fresh perspectives on the future of your business and work out how some of your staff might be better deployed.

Maybe your organisation needs to become a little leaner and more agile in the coming year, so you could even take heed of the number one New Year's resolution - lose weight. Reassessing your structure and cutting back in non-performing areas may seem a little drastic, but if there's ever a good time it's at the beginning of a new financial year. 

Building better relationships with your customers is a smart move.
Building better relationships with your customers is a smart move.

3. Develop better relationships with your customers

It's no secret that keeping your customers satisfied is vital to the success of your company, but how well do you really know the ways in which they operate - both as businesses and as individuals? Building a strong rapport with your existing client base can not only make them more amenable when it comes time to collect payments, but can even open up channels for increasing your revenue.

Having secure small business cash flow is hugely important.

By maintaining a healthy, amicable business relationship and learning more about the needs of your customers, you may identify areas where you can expand your offering, or lines of service that can be quickly and easily developed. Rather than simply approaching your debtors every month to demand payment, showing them new ways in which your business can help them can foster a strong bond while also boosting your income stream.

4. Secure more reliable sources of income

Speaking of asking for payment, at times of the year when your eyes are on the clock or the calendar, there's nothing worse than having to chase debtors and powerlessly await payments. Whether you have exciting strategic plans for the new year, or simply want to ease the annual or quarterly burden of rounding up your finances for tax purposes, having secure small business cash flow is hugely important. 

It's here that debtor finance can really help your business, especially at stressful times of year. After all, it's likely not just your company that is feeling the pressure, meaning that collecting your invoices may be fraught with even more delays. Speak to CashFlow Advantage, and make this year's transition a better one than the last.

If you'd like to learn how Earlypay's Invoice Finance & Equipment Finance can help you boost your working capital to fund growth or keep on top of day-to-day operations of your business, contact Earlypay's helpful team today on 1300 760 205, visit our sign-up form or contact [email protected].