Happy New Financial Year!

The start of a new financial year is a great time to sit down for a minute and have a look at your last year’s financial health. Here are 3 simple things to review that will help you get clear and focused on what to change or improve this financial year.

1. Profit and Loss – compare with the previous year and include % of sales if you can

  • Has income increased or decreased – any idea why?
  • Purchases and cost of goods – has this increased or decreased and is this relative to your sales? What is the percentage of purchases against sales? Has the cost of goods increased wjhile sales have not?
  • Review expenses and determine what has changed and why?
  • What is your percentage of Wage costs against sales and how does this differ from the previous year?

2. Who owes you money? – Outstanding debtors

  • Are there customers who are outside your payment terms? 
  • Do you have customers that are continually paying outside your payment terms? 
  • Are you spending too much time chasing payments?

Answering “yes” to any of these questions can easily be rectified by using some simple strategies such as automated invoice reminders before and after invoices are due, sending statements, and/or offering early payment discounts. Also, ensure your Terms are very clear on your invoices. Just being a little more pro-active will make a huge difference to your cash flow.

3. Manual and duplicate processes 

  • Are there areas in your business that involve writing or entering the same information in multiple places? Consider automating with systems that automatically “speak” to each other
  • Spreadsheets are great – however, are you regularly updating several spreadsheets? If so, this could indicate that it is time to move onto an electronic system that performs the same tasks and produces informative reports
  • If you have employees that need access to information to perform their tasks and the information they need is not readily available or up to date, this is also an indication to review your systems.

We are here to help you!

For further information about what accounting systems may best suit you, Or. contact Elke at MIEBS on hello@miebs.com.au or call 0410 819 783.

Read our blogs on systems in your business here.