'Clean out the cobwebs' for new tax year

With the new tax year upon us, it’s the ideal time for small businesses to spring-clean their finances, improve administrative procedures and streamline for the year ahead according to Bibby Financial Services.

David Robertson, chief executive of Bibby Financial Services, says: “In today’s busy workplace owners and managers can become so bogged down with day-to-day activities, that long-term plans and best business practices are swept into the corners and forgotten.”

Bibby Financial Services has developed the following checklist to help companies get themselves in ship-shape condition for a successful 2007 and beyond.

1. Review the clutter

Pull out your paperwork, look over invoices, bank statements, and receipts—and don’t panic if you find yourself confronted with a mountain of paper. Unnecessary and untended paperwork will slow your business down in the long run, so knowing where you stand is half the battle.

2. Divide and conquer

Separate paperwork into manageable piles. Throw out what you no longer need, catch up with your invoicing, meticulously work through files until you have a clean slate and clear view of your book-keeping. Time spent organising now is time saved later.

3. Get your business plan out of storage

With your day to day administrative work organised, you now have the opportunity to look at your long term plan. Revisit your business plan and review. Is there anything that can be improved? Have you followed your budget? If not how can you get back on track?

4. Be efficient

By taking a few moments to record all your ongoing projects it will be easier to raise an accurate invoice and will save you time in the long run. Always ask your customer for a purchase order number and quote it on your invoice. Raise the invoice immediately after the job has finished and be very clear about your payment terms.

5. Reassess your suppliers

When was the last time you negotiated prices with your suppliers? Many companies get familiar with suppliers and forget to push them for bulk or loyalty discounts. Think what effect a five or ten per cent reduction in costs could have on your profits. Take another look at the market place and discover what new suppliers are charging to see if you are getting a fair price.

6. Sort out your cash flow

Is your business funding is slowing down your firm’s growth plans? If so, consider more innovative funding solutions. A bank overdraft that is repayable on demand may destroy any momentum you have built up heading into the new financial year. Consider invoice finance; it frees up your cash flow by releasing up to 85 per cent of the value of your outstanding invoices as soon as you raise them. The invoice financier then chases payment for you – freeing up your time.

7. Put your accountant on speed dial

An accountant can help you get your systems in order; some will also give business advice. Plus, they provide a range of tax services. If you don’t yet have an accountant - start looking! If you are worried about fee levels, make sure you get quotes before appointing your chosen firm or individual.

8. Sort out your tax return - before the deadline!

With an accountant and a newly organised office, completing your tax return should be a stress-free endeavour. Rather than waiting until the deadline, complete your return as soon as possible. To complete your return, provide your accountant with records of your financial transactions from the previous year.

David Robertson says: "Managing a small business can be a daunting task. Many simply don’t have the resource to deal with day-to-day administrative tasks required just to survive. By taking the time out to organise your office and investing in efficient solutions, you can minimise your future administrative burden and refocus your efforts on business basics and long term goals."

 

20th March 2007

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