Many small companies start thinking about their year end some months after it has been and gone which is a pity as there is some much to be achieved by thinking about it before you get there.
Never mind the tax planning advantages (I always encourage clients to talk their tax advisor about 2 months before the year end) this is also a good time to make sure you are going to be showing the world the results you want to show them. Particularly if you have transactions that are not straight forward or that you have to show a different way in the statutory accounts (compared to how it is useful in the management accounts) – its good to understand this.
Last but not least it is a good idea to have the stake in the ground for next year and know where you are headed before you start having to be too reactive to where everyone else wants to take you.
Its all a bit like having a dodgy tree in the garden – check whether you need consent to take it down, dont wait for a gale, and get it done professionally to avoid unintended consequences.
Archive for the ‘Financial Planning’ Category
What to do BEFORE your year end
Thursday, August 19th, 2010Why do it?
Wednesday, June 30th, 2010Most of us have a garden that we take some degree of care of although our motivations might vary; we don’t want to be embarrassed in front of the neighbours, the vegetables need cultivating, the children need somewhere safe to play or, in my case, I want a haven where I can enjoy a good book and a glass of wine or a barbeque with friends.
Businesses need to take good care of their finances too. In this case, once the accuracy has been assured, the motivations will be broadly similar; to improve profitability, ensure controlled cashflow, support decision making and have some degree of control over the future.
Knowing what needs doing and why is usually quite easy to determine. The challenge is knowing who and when. I was hugely grateful to the person that was the solution to much of my gardening challenge and I love being part of the solution for the businesses I work with.
GIGO
Thursday, June 24th, 2010The great thing about what I do is that it is providing proactive support for the business owner to help them look forward and take control of the numbers in their business.
So, it can be really confusing when the first thing I do is look back over all the historical information but without understanding where the business is coming from and making sure that information is recorded accurately there is no starting point. We may know we want to get to Edinburgh but the route will be quite different if we are starting from London or Cardiff.
Get the base line right and then we can set out on an exciting journey together.
Why do I do it?
Thursday, June 10th, 2010I am always reviewing (management) accounts for clients/potential clients and indeed was asked to give a presentation on this subject earlier this week. As I was putting it together I thought it was important that anyone reviewing accounts knows why they arent waiting to the year end for the statutory accounts and why they are doing it – not everyone did! So here is the overview:
- to ensure accuracy
- identify profit improvement opportunities
- guide cashflow forecasting
- assist with planning and hence predictability as the basis of decision making.
Of course the detail will vary in every case but its good to have a starting point. And how much benefit you get from the review is often linked with how often and when it is done. The numbers tell a story – by reviewing the accounts a business owner may stand a better chance of ensuring there is a happy ending.
Strong roots for future growth
Monday, December 14th, 2009A Christmas picture I saw showed Father Christmas dragging a tree where he had cut off the roots – it wont be thriving after Christmas – pity he didnt think ahead.
Business owners should plan more carefully and think about how best to take the profits from their business. Indeed how much should be left in the business for reinvestment so that it can grow stronger than ever.
Enjoy the tree and its decorations and I hope that you get all that you wish for from your Christmas and New year break because you have left some roots in tact.
Plan for uncertain times
Tuesday, September 22nd, 2009The trees are turning a gorgeous array of colours as autumn starts to take hold and we can be fairly sure that this will be followed by winter. Less certain is whether it will be accompanied by green shoots of recovery in the economy.
Many businesses get concerned about producing financial plans when in such an uncertain environment. But it is possible to have more than one set of plans (or flex a single set) so that at least the best and worst case scenarios can be assessed and actions taken.
Winter may or may not bring lots of snow but it can do no harm to have a winter coat at the ready just in case. The other extreme is unlikely to be hot sunny days so sandals are unlikely to be a priority.
What are the priorities in your business?
