With the new financial year now upon us, now is the time to make some changes to your business, think of it as a fresh start if you will. One change you might like to look at is the way you do your books and if possible, incorporate some new habits that you can continue implementing throughout the rest of the year.
Here are 4 simple tips for you to consider implementing into your business:
- Finalizing the Previous Financial Year: Finalizing your books from the previous financial year gives you the opportunity to see how your business has gone overall. This is achieved by generating financial reports such as the Income Statement and Balance Sheet. If you use financial software (such as Xero or Quickbooks), these reports can easily be generated.
- Evaluating Your Previous Year: Compare and evaluate your financial situation and set goals that are specific to your company needs. This process provides an opportunity for you to see trends and any potential problems in ways that can be difficult to spot from the regular day to day operations. Always pay close attention to the Income Statement. The information it provides helps to assess whether too much is being spent on any one any category of expense and whether resources are effectively allocated in keeping with different types of revenue streams.
- Starting the New Year: First, set up your financial software, spreadsheets or ledgers for the new year, then set goals for keeping up with the bookkeeping process, based on your experience of closing out the books from the previous year. For example, if you found that each month you were behind in reconciling your accounts and lodging your taxes to the ATO (Australian Tax Office), make this year your goal to keep your books up to date each month or week.
- Taxes for the Previous Year: At the beginning of each year, aim to keep track of all the tax forms that need to be completed and fill these in as early as possible. This will give you your tax liability which you can budget and pay on their due date.