October 18, 2012 – RSM Bird Cameron, one of the largest mid-tier accounting firms in Australia, offers 13 suggestions that business owners should think about before 2013 to improve profits, cash flow and reduce stress levels.
Andrew Graham, national head of business solutions, said, “Many businesses in Australia are still facing a volatile economic climate with some industries producing record results and others struggling.
“It is important to consider the uncertainty business owners face and put plans in place to reduce that as 2013 approaches.
“Having strategies in place to end the year, and start the new one in the best shape possible, will ensure that business owners can make the most of the holiday period from a business perspective, but also on a personal level.”
Cash flow is a problem many businesses already face. As always this will be felt even more throughout the new year period as the holiday season leads to slower payment terms.
Graham said, “Business owners shouldn’t hesitate to seek help and ask advice from accountants, advisors or other specialists if they are worried about their business or managing their cash flow over the holiday period.”
Tips to get the best start in 2013
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 Easter.
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 with other products as a value add.
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 staff are aware of the targets for each week and be proactive monitoring and 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. Consider a shutdown period if the Christmas and new year period is traditionally not busy to use up staff annual leave balances during this quieter time.
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 critical particularly over this period when the cash cycle tends to tighten.
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’ 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. This will strengthen relationships into the new year rather than simply being a cost of doing business.
11. Carefully plan end of year staff parties to reward and recognise efforts for the year. Remember your workplace obligations to provide a safe environment for the event in relation to alcohol and discrimination.
12. Set effective goals. The beginning of the new year is an ideal time to review goals set at the beginning of the financial year, ensure you are track to achieve them and put in place an action if you can see areas that are not working. Important things to consider include retirement planning, present and future investments, maximising your superannuation scheme and reviewing assets.
13. Remember that you deserve 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.