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Plan To Make Money In The New Financial Year

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If there’s one thing you should start doing for this new financial year which is just a couple of months away, it’s draft a budget and stick to it. I can guarantee budgeting is one of the best resolutions you’ll make for your business, especially if you’ve never done a proper budget.

A budget shouldn’t be written on the back of a paper napkin or lost somewhere in your pile of notes. It should be a document or software which is easily accessible, updated regularly and reviewed monthly.

Think of a budget as your plan on how to make money this coming financial year. You can’t possibly know how much money you’ve made without knowing how much you’ve spent for the business. And you can’t slash costs if you don’t know how much you’ve allocated for it.

Your business budget is the thermometer that tells you when business is cooling off or it’s on fire and doing well.

 

How Do I Draft A Budget?

Drafting a budget may require extra work, but it pays off at the end of the financial year because budgeting helps you

  • set targets
  • fix issues before they grow worse and
  • monitor business costs.

By setting a contingency plan in your budget, you will also be prepared when business becomes unpredictable or takes a turn for the worse.

If this is your first time doing a proper budget, you will need all your business data and historical trends. The easiest place to start is to look at your balance sheet, cash flow statement and profit and loss statement.

 

  1. Profit and Loss Statement

Whether you are profitable or running at a loss, this report will outline your expenses such as leases, payroll and utilities as well as your income so you will know what to allocate in your budget. If you are losing money, a budget will help you implement strategies to break even, reduce your losses or make a profit.

 

  1. Balance Sheet

This lists your assets, liabilities and equity in the business. Understand the value of your assets such as intellectual properties, machineries and brand name. Figure out your biggest liabilities and see how you can reduce them or pay them off quicker.

 

  1. Cash Flow Statement

Find out how much cash you have in hand and how much goes into operations, investment and financing.

Try to go back a few years and pick up any trends such as rising costs or poor cash flow during slow seasons. The trends will tell you how to allocate your money appropriately over a year. Studying your business and market trends will help you set realistic targets for your budget.

Once you have all the numbers, always double check it. Having the wrong figures will give you wrong estimates, which is disastrous for business. Get an expert such as a bookkeeper or accountant to go over the data so you can have a peace of mind.

Now, it’s time to set realistic targets based on all the evidence you have. Again, you can enlist professional help if this is your first time planning a budget. I always believe that good help is worth every dollar spent.

Finally, the last element of your budget is a contingency plan. You should have several in place based on a few scenarios. Think of what to do if the economy shrinks or stagnates, which affects consumer spending and your bottom line. Or what if certain supply items become expensive due to a falling Australian dollar? How about a scenario where business picks up and you need more staff to cope?

 

Sticking to Your Budget

The secret to sticking to your budget is having regular reviews. You’re more likely to manage your budget well if you constantly keep track of what’s going on in your business. Reviews should not take too long once you implement a process, allocate proper resources and do it consistently.

Keep in mind that your plans may change as the year progresses, especially if you receive good or bad news out of the blue. You must be flexible enough to change your budget based on the latest projections.

If you’re feeling lost, contact a qualified professional such as a bookkeeper. They can guide you through the whole process and recommend strategies to assist your business. They should also sit down with you regularly for budget reviews to help achieve your goals.

It’s a brand new year, so start working on your business resolutions soon. Book a “Next Actions Discussion” with me if you would like to discuss the way forward or call our office today on (07) 3355 6427

Specialising in Xero bookkeeping, Notch Above is a Brisbane bookkeeper and BAS Agent located in Alderley that offers Xero setup, as well as training and ongoing support. Notch Above can take care of all the bookkeeping tasks you would rather not do, like bank reconciliations, supplier payments, payroll services, debtor control and BAS returns.

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How a Bookkeeper Counteracts the 3 Common Stresses of Small Business Owners

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Being a small business owner is stressful. Reports, surveys and studies of small business owners around the world claim running a small business is their # 1 cause of stress. And the three common stresses of small business owners? Lack of control, having no time to ‘do it all’ and reacting too fast and too soon. It might seem very simple, but hiring a bookkeeper can counteract all three.

 

Common Stress 1: Lack of Control

As a small business owner you’re dealing with clients, investors, creditors, business partners, employees and government legislation while trying to navigate traffic, employee dietary needs and healthy snacks for kindy. Not surprising so many small business owners feel they have no control in their lives and get majorly stressed out. This is one key area where an efficient bookkeeping service can help.

Just knowing that your quarterly or monthly BAS Return will be lodged correctly (and on time) is certain to give you back a feeling of control. Knowing that your annual payroll reconciliation and tax office reporting is taken care of, and that the superannuation payments are calculated accurately, might free your mind to think of other things instead of being overwhelmed.

“Notch Above have made my business life soooo much more ordered and lowered my stress levels by half! AND they’ve saved me money but ensuring I’m compliant and up to date with all the latest regulations and compliances that have to be adhered to.” Brett Lane, Keltah Ventures

 

Common Stress 2: Reacting Too Fast and Too Soon

Small business owners are often so overwhelmed by volumes of paperwork, compliance demands and dormant sales leads that when issues arise suddenly (especially those involving capital purchases and major repairs) they make inappropriate responses. Result? Overwhelming stress.

Having an efficient bookkeeping service means you have real-time, up-to-date financial figures and accurate cash flow data, enabling you to make informed decisions. Balance this against the stress of making a super-fast purchasing decision only to remember an overdue loan or tax instalment a few weeks later.

“Notch Above has been offering outstanding bookkeeping and administration advice for my clients for over five years. Notch Above is a real expert in the field and importantly makes life easier for people running their own business. A true professional who goes the extra mile.” Scott Grady, Partner at CNS Partners

 

Common Stress 3: No Time to “Do it All”

Small business owners (especially those in the first year of business) are doing it all. Missing valuable time with family and friends, having no time for hobbies or creative pursuits and probably working more than 70 hours a week, it’s no surprise they’re experiencing significant stress.

If you are spending your time reconciling bank statements or trying to manage the year end payroll data or process group certificates, you are not using your real expertise working on your core business. An efficient bookkeeper gives back your valuable time. Time you can put back into growing the business or spend with family or even ride your bike again.

“I have saved at least 1/2 day a month of my valuable time which has been put to better use and my bookkeeping needs have been expertly and thoroughly looked after.” Shirley Farrell, HR Management Services.

We would love to help you put energy and passion back into your life by taking away your bookwork drag. Having had over 20 years bookkeeping and accounting experience, we truly understand your frustrations and stresses. Why not get in contact today, arrange a free consultation and check out our hassle-free bookkeeping packages.

Reduce your stress. Let us take care of your bookkeeping, while you take care of your business.