Another Financial Year Gone

Can you believe that the end of financial year is upon us... Again?

here are 4 Tips to help with the year ahead.

I'm confident that I am not the only business owner who feels that the year has gone too quickly, and is also a little worried that this next financial year will pass by just as fast.

For many business owners, the 30th June represents tax time.  For management accountants however, it is a time to report, analyse and plan for the next financial year.

I want my clients to be profitable.

Tax is a byproduct of being profitable.

Tax strategies are most effective for profitable enterprises.

I hate to be the bearer of bad news, but delaying getting your tax completed and lodged, to avoid paying tax is not smart cashflow management. Tax is inevitable, so do not delay completing your year-end financial information that can actually help you to improve your business performance.

Ask yourself the following questions:

  • Are you in business to make a profit?
  • When was the last time you saw an accurate profit & loss report?
  • What did the profit & loss report tell you about your business performance?
  • Do you think you have the potential to achieve higher profits?

Of course, there are other important financial reports that should be reviewed (such as the balance sheet and cashflow) but lets keep this discussion simple and purely focus on PROFIT.

I am yet to meet a business owner who was upset because this operational profit was too high. Unfortunately, there are may businesses who struggle to break even causing great stress and anxiety for their owners.

It's critical to determine how your business performed in the last financial year so you can adequately plan for the next. However, numbers are just numbers until they can be compared to something meaningful.... like a budget!

  • Did you meet your budget for the last financial year? If not, why not?
  • Are you surprised you made a loss? Do you know how to turn your business around?
  • Did you make a profit it in the year, but have no cash? Where did your cash go?

The end of financial year is a great opportunity to review your performance of the last 12 months, and plan for the future by creating a realistic budget for the next year.

Budgets are the starting point for formally documenting your business goals, tracking your performance each month, and providing valuable comparisons that enable business owners to make proactive business decisions throughout the year to ensure they reach their PROFIT potential.

For some entities, knowing your break even point or how to improve cashflow will be critical for surviving the next 12 months.

We recommend that organisations do the following to ensure they make a PROFIT in the next financial year:

  1. Prepare accurate financial reports ASAP
  2. Scrutinise your performance in the last 12 months
  3. Develop a realistic budget for the next financial year
  4. Monitor your performance on a regular basis

At Precision Management Accounting, we don't do tax, but her help businesses with PROFIT.

Can we help to set you up for a better year ahead?