Self Assessment is a distant memory, and it’s a great time to think about how you could spring-clean your business books and make your company more efficient.
1. Review your customer list
Look at who you sell to. How quickly does each customer pay you? Do any of them regularly question your price, or expect you to deliver more services for no additional fee?
Remember, this is your business. You do not have to deal with anyone who makes your life difficult.
It is sometimes hard to turn customers away, particularly as a small business in the early stages of its life, but you will be glad of it in the long run — and your bill for stress pills will be less.
2. Look back at your cash flow
Have a look at your business bank account and see how much you had in the bank at the end of each month. When were your peaks and troughs? Did you have particular months when you were really short of cash? What could you do next year to stop that happening again — do you need to open your business to new markets, to put your prices up, or to borrow extra money?
If you do not keep track of your cash, you could find yourself unable to pay bills on time, which will damage your relationship with your suppliers and they might not go the extra mile for you next time you need it.
3. Close any cancelled invoices or bills
You may have had to cancel an invoice that you’ve issued to a customer, or a supplier may cancel a bill they’ve given you. If this is the case, make sure these items aren’t showing in your business books any more.
4. Review your suppliers
Could you negotiate a discount on the basis of bulk purchases, or as a long-standing customer? Are there other suppliers who can give you a comparable product at a cheaper price, or with a faster service?
5. Is your categorisation consistent?
When you’re deciding which category in your business books to put your costs into, such as stationery or postage, you may well find that some of your company’s costs could easily go into more than one category.
Make sure you allocate these costs consistently as they recur. That way, if your accountant needs to move the cost to a different category for tax reporting, it’ll be quicker for them to do that. Also, it’s much easier for you to track how much you’re spending in each category if you always put the same costs in the same places.