October 25, 2011 – RSM Bird Cameron, one of the largest mid-tier accounting firms in Australia, offers 12 things business owners should complete before 2012 to improve profits, cash flow and reduce stress levels.
Andrew Graham, national head of business solutions, said, “Many businesses in Australia are again facing a volatile economic climate, and there is no doubt that an economic downturn could spell the end for some businesses. This is demonstrated by a surge in insolvencies and the appearance of increased activity by the ATO in collecting long-standing tax debts.
“With this in mind there is a very real possibility many businesses will start the new year facing increased cash flow difficulties or just managing to get by, instead of looking at ways to strengthen and grow the business.”
Cash flow is already being stretched, and as always this will be felt even more throughout the new year period as the holiday season leads to payment terms being slowed beyond the delays businesses are already seeing.
Graham said, “Business owners need to remember that it is never too early to seek help and ask advice from accountants, business advisors or other specialists if they are worried about their business or managing cash flow over the holiday season.”
The below tips can help businesses start 2012 in the best way possible:
1. Review the products and services you sell and tailor the mix to appeal to changing customer needs for the holiday and new year season. Also start considering and planning for other times in the year when customers’ needs change, for example winter.
2. Review pricing structures to ensure competitiveness and profitability. Put formal procedures in place to monitor and proactively respond to competitor pricing changes.
3. Review stock levels to make sure you can satisfy customer demand for profitable product and service lines, and identify slow moving stock that can be liquidated as “bargain buys” or bundled into gift packages.
4. Review sales, marketing and promotion plans and make sure they are optimised to help achieve the best results not only during the holiday season but well into the new year. Ensure all staff are aware of the targets for each week and be proactive in addressing shortfalls.
5. Review staffing plans and confirm acceptance of the rosters by all staff. For non-retail businesses, annual leave plans need to be balanced and finalised as early as possible to ensure the business continues to operate effectively.
6. Review fraud and theft protection systems and ensure all staff are reminded of their responsibility to be vigilant as customer traffic increases and the pressures of Christmas expectations can motivate increased customer and staff theft.
7. Review debtor lists and actively chase all overdue accounts. Any amount not collected by December 23 is unlikely to be collected until February or later. Collecting money owed to you is good business – it does not make you a Grinch.
8. Review the use of finance products for effectiveness. Overdrafts, premium funding, lease facilities and cash flow funding products can all be excellent tools to help match a business’s cash supply with planned outlays, and may be especially useful in managing cash flow throughout the holiday season.
9. Complete a GST health check. Small businesses are in danger of losing time and money because of unreliable or outdated business systems causing them to incorrectly report GST.
10. Strategically plan end of year gifts and entertainment to key customers, prospects, suppliers and business partners to strengthen relationships into the new year rather than simply being a cost of doing business.
11. Carefully plan staff end of year parties to reward and recognise their efforts for the year. Remember your workplace obligations to provide a safe environment for the event in relation to alcohol and discrimination.
12. Remember that you deserve to enjoy a break as well. Plan some time off particularly around public holidays – take care of your health and enjoy some downtime with family and friends. The new year will dawn a brighter place if you end this one in a happy frame of mind, and feel prepared for the year ahead.
About RSM Bird Cameron
RSM Bird Cameron is the largest mid-tier accounting firm in Australia with national ownership and profit sharing and offers a full range of specialist advisory services, including business consulting and advisory, assurance and advisory, taxation consulting, corporate consulting and turnaround and insolvency. RSM Bird Cameron is a core member firm of RSM International, the sixth largest network of independent accounting and consulting firms in the world.