Looking forward to the coming year, there are steps you can take to prepare and ensure your business is in order.
Here are 12 tips to help your firm start the new year in a good position:
1. Map out a financial forecast for the forthcoming year
Ensure this forecast is realistic to gain maximum benefit. Use this to see if there are any points where extra working capital can be used.
Establish clearly how this financial forecast will impact business activities and investment.
2. Review and remind your clients about payment terms
Stick to your conditions and enforce payment terms. A simple way to do this is by including these details on your invoices as a reminder.
This may help your finance team to reduce the amount of time spent chasing late payments.
3. Consider how you can invest in your team
Your employees are your most valuable asset, so make sure to invest in their development and support. Offer training and professional development opportunities and create a positive and inclusive workplace culture.
4. Use invoice finance to manage cash flow in wake of late payments
Access extra working capital by using invoice finance. Late payments can have negative consequences for businesses, such as having to write off unpaid bills or making it difficult to manage cash flow.
5. Review your data arrangements and make sure they are compliant with GDPR
All personal data must be managed in a safe and secure way, the GDPR will be enforcing this with large fines for breaches of the regulations. If you are part of the recruitment industry, there are additional changes to be aware of.
6. Invest now to protect your business against cybercrime
Act now to invest in safeguards to manage the risks to your business. If you are attacked and the correct steps to protect against cybercrime haven’t been taken, you can incur a fine.
7. Review and update your business plan
Take some time to review your business plan and make any necessary updates to reflect changes in the market, your business goals, and any new opportunities or challenges you may have faced in the past year.
8. Agree the scope of work before beginning a project
To help make sure you get paid on time, make expectations about your costs and payment terms clear at the start of your contract, before any work goes ahead.
9. See if asset based lending is a good fit for your business
Many SMEs are missing out on the opportunity to release capital from assets such as stock, property, plant and machinery. Discover the untapped potential asset based lending could bring to your business.
10. Plan the succession strategy for your company
A succession strategy will ensure a successful transition from one business owner to the next, and financial planning is important in safeguarding this process.
11. Track and review your financial performance
Take a close look at your finances and identify any areas where you can save money or increase revenue. Consider implementing cost-saving measures, or finding new ways to generate income. This can help you to identify areas for improvement and make more informed decisions.
Restricted cash flow is a barrier to growth, and there are many types of finance available that can grow in line with your turnover.
Explore the different benefits invoice discounting and factoring can offer your business.
12. Take advantage of bad debt protection
Bad debt protection can help you to operate secure in the knowledge that you are covered should your customers get into financial difficulty.
Overall, the key to preparing your business for the new year is to take a strategic and proactive approach, and to focus on continuous improvement and growth. By regularly reviewing and updating your business plan, setting new goals, and staying on top of industry trends, you can position your business for success in the new year.