NEW YEARS RESOLUTIONS NO BUSINESS SHOULD DO WITHOUT

Do a financial health-check of your business

Year-end is a good time to check the financial health of your business. Reviewing your financial statements and doing some basic calculations on liquidity, solvency, profitability and return on investment, and comparing these results with previous annual figures and similar businesses in your industry will help you identify strengths and key areas of weakness or potential threats to your business.

Revisit your strategic plan

After doing a financial health check, you should use the end of
the financial year to reconsider your strategic plan. This should involve an analysis of your market and predict ions on future developments. It is important that your strategic plan reflects the objectives you, as the business owner, have for your business and your personal life.
Your strategic plan should also address weaknesses identified in the financial health check and should include a work plan, responsibilities and due dates. The work plan should be implemented and monitored throughout the coming year.

Draw up a budget for the new financial year

Your budget needs to align to your strategic plan so you can
allocate resources to achieve your plan’s objectives. If the budget shows that an objective is not affordable, you may either need to seek more resources for that objective (for example, borrow funds from a bank) or modify your strategic plan.
List your assumptions when setting your budget. To stress
test your business, you can amend these assumptions to see what it does to your financial position, e.g. include a 10 to 20 per cent reduction in sales or a 20 percent increase in fuel costs.
A budget should be regularly monitored against actual results and variations should be questioned.

Prepare a cash flow forecast

One of the most significant problems a small business can face

is poor cash flow. A cash-flow forecast is, therefore, a fundamental part of good business practice. Ensure that your cash-flow forecast aligns with your budget and is monitored regularly.

Review your business’s profitability 

Issues impacting your business profitability may come to light in your financial health check, review of your strategic plan and while drafting your budget. Other issues impacting profitability may also be found by reviewing:

• staff productivity
• your production process
• your supply chain
• how you are using your business assets
• costs.

You should also consider tactics to increase sales of your
most profitable products or services, reduce input costs
and seek advice from Hart Partners your CPA Australia registered tax agent
on tax effective strategies.

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**Disclaimer: The information is sourced through CPA Australia YEAR END TAX TIPS June 2016 Guide**

For tax help, please call Hart Partners today: 
Phone (03)9600 3220 Mobile: 0413 222 922 Fax (03) 9376 3507 
or email us paula@www.hartpartners.com.au.