Start the New Financial Year Right: Tips for Getting Your Accounts in Order
As a small business owner, the start of a new financial year is an excellent opportunity to take stock of your business's financial health and prepare for the year ahead. By getting your accounts in order at the beginning of the financial year, you'll be better equipped to make informed decisions, set realistic financial goals, and ensure that you're meeting your tax obligations.
In this blog post, we'll share some tips and hints to help you get your accounts in order and start the new financial year right.
Review Your Financial Performance
The first step in getting your accounts in order is to review your financial performance from the previous year. This review will help you identify areas of strength and weakness and set realistic financial goals for the new financial year.
To review your financial performance, you'll need to analyse your income and expenses, profits and losses, and cash flow. Use financial reports such as balance sheets, income statements, and cash flow statements to help you get a clear picture of your financial performance.
Set Financial Goals
Once you've reviewed your financial performance from the previous year, it's time to set financial goals for the new financial year.
Your financial goals should be realistic, measurable, and achievable.
By setting financial goals, you'll be able to focus your efforts and make informed decisions that help you achieve your objectives. For example, you might set a goal to increase revenue by a certain percentage or reduce expenses by a certain amount.
Plan for Taxes
Another essential step in getting your accounts in order is to plan for taxes. Tax planning involves understanding your tax obligations, estimating your tax payments, and taking advantage of tax deductions and credits.
By planning for taxes at the beginning of the financial year, you'll be able to avoid penalties, minimise your tax liability, and ensure that you're compliant with tax laws and regulations.
Consider working with an accounting professional to help you navigate the complex world of tax.
Update Your Accounting System
Keeping your accounting system up to date is another critical step in getting your accounts in order. Your accounting system is the backbone of your financial management, and it's essential to keep it accurate and current.
Review your chart of accounts and ensure that it reflects your business's current financial situation. Make sure that your accounting software is up-to-date, and that you're backing up your data regularly.
If your software isn't hitting the mark, this is a good time to make the move to something that better suits your needs.
Revisit Your Budget
Finally, it's crucial to revisit your budget at the start of the new financial year. Your budget is a roadmap for your business's financial future, and it's important to keep it up-to-date and accurate.
Review your budget from the previous year and adjust it for changes in revenue or expenses. Use historical data to help you make informed decisions and create different scenarios to help you prepare for unexpected events.
Getting your accounts in order at the start of a new financial year is a crucial step in setting your business up for success. By reviewing your financial performance, setting financial goals, planning for taxes, updating your accounting system, and revisiting your budget, you'll be better equipped to make informed decisions and achieve your financial objectives.
If you need help getting your accounts in order, consider working with a bookkeeper or accountant who can help you navigate the complex world of small business finance.
Remember, the key to success is staying organised and keeping your accounts up to date. Start the new financial year right and set yourself up for success!
Nothing on this page is intended to be or should be construed or taken as accountancy, investment, tax or any other kind of advice. We recommend individuals and companies seek professional advice on their circumstances and matters.