Spring is here and the weather is finally warming up. This is a great time to declutter and set your business up for growth. The 2020 year has been filled with negativity, create some positive changes in your business and get organised for a fresh start. Here are some tips to spring clean your finances:
1. Go paperless
With more and more offices working from home, having a paperless office makes the process easier. Check which business records you need to keep and make sure they are stored safely. They can be stored electronically for added security and efficiency.
Here are some additional digital processes that can increase efficiency in your office:
Are your clients signing paper proposals and agreements? Electronic proposals cut down the time to get an agreement signed. They include added benefits of analytics so you can see the amount of time the client has spent viewing each section of the proposal. You can also automate the follow up process to send reminders if the proposal is not signed.
If you are currently using a desktop version of your accounting software, consider moving to a cloud version. Cloud accounting allows your information to be accessible anywhere you have an internet browser. You can access your data from home, your mobile phone and you can check in while on holidays.
Electronic storage of receipts
Having your receipts in one central place using programs such as Hubdoc can make life easier. If you are subject to an ATO audit, you can rest assured that your receipts are stored away safely. Hubdoc has the benefit of automating receipt entry into your accounting system as well as storage of your receipts. Receipts are always at your fingertips and are available anytime from anywhere. Hubdoc is also free with Xero subscriptions, so if you are using Xero, why not take advantage of the added benefit.
If you are going paperless, it is a good idea to make sure you have the right internet security and backup system for your business. Consult your IT professional if you are not sure.
2. Automate manual processes where possible
Having a review of your processes and procedures can help you identify inefficiencies and opportunities to automate. Automation can eliminate mundane tasks and increase productivity. Automation can also make it easier to scale your business if you are wanting to grow.
When you are automating any business processes, keep in mind that your client should always be front of mind. It’s not worth using automation if your client is going to be adversely affected.
3. Review your expenses
This is as simple as looking at a profit and loss and going from top to bottom. Are there any services that you are paying for that you are no longer using? Can you get a discount with your phone or electricity provider? If you are in a contract for a service, create a calendar reminder before expiry so you can review your options before the agreement automatically renews.
Marketing is not a great place to cut expenses at the moment, however, you should review where your leads are coming from. Make sure you are getting the most bang for your buck and spending your marketing budget in the right place. Are you getting a good return on your investment? Do you need to mix up your marketing efforts?
4. Review accounts receivable and accounts payable
Run an aged receivables report. Does this reflect the amounts that are actually outstanding? If there are any overdue amounts, following up on payment can provide an instant injection of cash. Write off any small balances or amounts you won’t collect. This will make sure your accounts receivable list has had a spring clean and accurately reflects the amounts owing to you.
Once accounts receivable are up to date, there may be other things you can do to speed up payment collection such as giving clients online payment options. If your client is on a payment plan and you are receiving multiple payments, why not set up a recurring direct debit so that you don’t have to follow up payment? That way you will reduce the time from invoice to payment and get the cash in your bank faster.
Do you review your accounts payable report regularly? It is a good idea to review this at least monthly. There may be duplicate entries or credit notes that need to be applied. It is also a good idea to check if there are any processes that can be automated, for example, recurring invoices and direct debit arrangements can automate payments and save your time. Hubdoc also has the ability to fetch invoices directly from some suppliers and save you time entering invoices.
5. Review your budget and goals
Now that the 2020 financial year is over, set a budget for 2021. If you have created a budget, you can update it with the actual results for the September 2020 quarter to see how they compare and make any adjustments based on how you have done so far.
Do you have your goals written down? Writing your goals down increases your chances of achieving them. Once they are written down, your cloud accounting system makes access to data much faster so you can see how you are tracking.
Do your finances need a spring clean?
If you need help to spring clean your business finances, please get in touch. We can schedule a complimentary strategy session to discuss your business, the current opportunities and challenges and the next steps you should take now to take your business to the next level.
We are 100% virtual. However, if you would prefer an onsite visit, we service the areas of Albury, Wodonga, Griffith and Leeton.