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Business Finance 101 – Year End Business Planning – Checklist – Preparing for a great Year End!
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Published on Thursday, 28 May 2020 16:07
Year-end business planning is part of the on-going plan of running a business – you need to keep reviewing the plan, and preparing for year-end early is the way to have a great finish! So here are the key areas to work on – do 1-2 a week to be ready by 30 June.
1. Accounts in Order
Ensure your accounting is up to date as much as possible – with modern software moving into the cloud, and bank feeds streaming the data for easy rules to be set up to speed up data allocation, the task is less a burden each year! If you have questions, call me for FREE discussion – 0407 361 596!
2. Where are you at?
Print the Profit and Loss and Balance Sheet – read them! Not sure how they work? See our explanation Profit and Loss and Balance Sheet.
Are cost of sales in proportion to sales – if you sell product – work out the margin – what margin is typical of YOUR industry?
Is there a profit? If not – are expenses too high?
Are sales declining/struggling? If there IS profit, but cash is tight – are trade debtors (accounts receivable, clients who own you) climbing – look on your Balance Sheet? Not sure?
3. Review Financial Plan and Goals
- Did you meet sales goals? Is it clear why? What can you do to improve?
- Did you improve profit?
- Did you lower expenses?
4. Tax plan
Too much profit? This could mean more tax. If you are selling, a good profit is essential to be attractive to a buyer.
But if not selling – maybe some expenses can be made in June – stationary, stock, pay superannuation early instead of in July – ask your accountant or us for tips.
Note – be careful – high-cost purchases such as equipment, vehicles or furniture will NOT always be expensed and reduce your profit – they may end up on your assets on the Balance Sheet – unless the $20,000 upper limit on asset write off is still available (it has been extended for another year to June 2019).
5. Owner / Director Results
Determine the consequences to you the owner or partner (or Director if you have a company). What is the benefit to you? A director’s bonus (can reduce profit and company tax). Are you getting the return you wanted form your own business? Who can you seek for a review and advice – your accountant, business advisor, successful business associate/friend?
6. Review Business Plan
What parts of your plan need more attention – there are 5 Core Functions every Business must perform – Leadership, Employee/Team, Finances, Operations, Marketing & Sales – what are is weak – no-one has it all working perfectly (even big business!) – and one area may get neglected while you focus on improving another – the key is starting to delegate regular processes to part-time virtual or in-house assistants, so you can ramp up Marketing & Sales to propel the business – otherwise who will? It’s not just about a good advert – it’s the whole plan and strategy – keep improving and find what works and sells!
Year-end business planning is an on-going plan when running a business – you need to keep reviewing the plan, and preparing for year-end early is the way to have a great finish! So to work on – do 1-2 a week to be ready by 30 June – action gets results!
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