The year is nearly at a close, which means you may want to take some time to start thinking about new year resolutions you can introduce into your business.
So if you’re planning to make a splash in the new year, what can you do to give your business a boost and get the year off to a perfect start?
1) Keep your books in better order
Balancing the books may not be the most exciting part of running a business but it is certainly one of the most important. Without well managed accounts, you will struggle to know how much money you’re making or how much you need to pay the taxman.
So why not pledge this year to make bookkeeping an integral, but manageable, part of your work? Dedicate just an hour a week to reviewing your bank transactions, logging your expenses and managing your invoicing, rather than leaving everything to pile up, and it’ll be easier for you to see at a glance how your business is performing.
Remember that good bookkeeping can give you very useful information such as whether your business is making enough profit and bringing in enough cash to cover all its costs and leave some money over for you. So neglect your books at your peril!
2) Get your self-assessment done early
If you’re running a small business, it’s likely that you’re one of the millions of people that has to submit a self-assessment tax return. But when do you actually get round to doing this? Is your tax return done and filed with HMRC in December? Mid-January? Or is it a last minute dash to get it in during the final hours of deadline day?
Make one of your new year’s resolutions to tackle self-assessment as early as you can, and to submit your tax return to HMRC with plenty of time to spare. That way you won’t be doing everything at the last minute, you’re less likely to rush and make mistakes and you will save yourself a huge amount of stress in the process.
If you need help getting set for Self Assessment, check out our handy survival guide for some more tips on tackling your tax return.
3) Review your customer list
Does your heart sink at the very thought of trading with some of your customers, and are there others who you’re always glad to hear from? Remember, it’s your business, so you don’t have to deal with anyone if you don’t want to!
Try looking through your customer list and identify those customers who take ages to pay, or who argue and quibble about what you’ve invoiced them for, or even just those that you don’t like dealing with. Then, provided you feel that your business can afford to do so, think about whether you could politely point them to another supplier.
However, overhauling your customer list doesn’t just have to be about getting rid of problematic customers. Remember that personal recommendations can often be the most powerful form of advertising, so why not ask those customers you like and enjoy working with to refer you to their friends? Or perhaps introduce a dedicated referral scheme so that they receive a reward for every person they successfully introduce to your business.
4) Collect your cash faster
Many small business owners are far too nice to customers when it comes to chasing the money they’re owed. They don’t follow up invoices quickly, often because they’re worried about offending their clients, but that’s a dangerous mindset to have when it comes to business. You need to get the cash if you’ve done the work; because if there isn’t enough money coming in to pay the bills, your business is likely to struggle to survive.
Try setting clearer payment terms and make sure your customers know when they have to pay you – and then keep to these terms. Of course, when clients are in genuine difficulty you can give your them more time to pay, but being strict about your payment terms will help you deal with those customers who repeatedly fail to pay you on time for no reason.
If you are worried about managing or chasing your invoices, why not also invest in specialist invoicing or accounting software that will send out automatic reminder emails to customers when they don’t meet your payment deadlines. You may find this easier and quicker than chasing them manually, and is especially useful if you don’t want to have that awkward phone conversation about money with them.
5) Review your supplier list
Make a list of all the suppliers that you buy from, and think about what it’s like to deal with them. Think of people such as your mobile phone provider, your accountant, your virtual PA, the printer who produces your business cards…
How good are their products and services? Do you find yourself continually having to check to see if they’ve made mistakes, or supplied everything that they promised? Do they deliver on time, or do you have to continually chase them? Will they go the extra mile for you, to help you fulfil a rush order from a customer? Is there anyone who could supply the same, or better, quality goods or services, but who is based nearer to your office, or can offer a lower price, or bulk discounts? Do not be tempted to always buy the cheapest, because this could reduce your own brand quality, for example, if you switch to a cheaper virtual PA, then he/she may not offer an out-of-hours answering service.
Emily Coltman is chief accountant at FreeAgent.