7 Things to do today to Help your Business for End of Financial Year

Does End Of Financial Year fill you with apprehension and a nervous sweat?

It’s like your in direct sight of a rampaging bull headed straight at you and you have nowhere to run or hide.

For the uninitiated End of Financial Year or EOFY abbreviated is that time of the year when your business calls time on it’s scorecard and assesses it’s financial performance for the year whilst getting ready for the new one coming.

EOFY doesn’t have to be scary and here are 7 things you can start doing today to take the fear away.

  1. Know your Balance sheet

This is where the numbers of your business tell a story. Every Asset and Liability should be reconciled so you know exactly what money is due to come in and money to go out. It is good Financial Practice for all Balance Sheet accounts to be reconciled each month, so you know where the numbers are.

One client had forgotten a $10,000 debt sitting in their debtors for over a year. How can you forget something like this? Well, it happens if no one is reconciling your debtors, especially when the focus is always on shiny new customers, sometimes forgetting about the old ones.

  1. Time to Take Inventory

For a product-based business this is critical as inventory sitting in your warehouse is where your excess cash is. Counting what you have, makes you aware of how long it has been sitting there and forces you to make decisions about what to do about it. Leave it sitting there for another year or discount it at a lower price to get rid of it. The choice is yours and your bank balances to make.

This “taking Inventory” also applies to service -based businesses. You can count your software licenses, your subscriptions and assess whether you still need all those Adobe Photoshop subscriptions, chances are you don’t need all of them.

  1. Insurance Risk

12 months is a long time in business, how has yours changed during this time. New Customers and new markets? You need to make sure you are protected, and you are minimising your risk profile.

A business can move to new premises during the year and then latter realise that in the event of a fire they are not covered because they had not disclosed the new location to their insurer.

The motto of EOFY is tell your Insurer Everything, pretend you are going to confession, leave nothing out to make sure you are covered.

New offices, new cars…tell them everything.

  1. Check your Data

Data is one of the most valuable assets of any business. It helps you make decisions to help boost revenue and make you more efficient. Most businesses are riddled with Duplicate Data !

Is that Anne Smith or A. Smith in your customer listing?  No wonder email campaigns get no traction. Get your data clean and remove the duplicates. Run your customer listings and remove the duplicates.

Don’t forget to check your Physical Data as well. Is your data secure?  Is your server still under warranty? Is your data protected as best you can from Cyber Security threats?

  1. Are your transactions up to date?

Make sure all your invoices are up to date & you have paid your taxes on time. Talk to your bookkeeper to make sure all transactions are posted in your accounting system.

You have only days to go before June 30th so you need to make sure the profits you show reflect all your business costs during the year.

Don’t be that business who closes the year off only to find latter that additional expenses from last year have come to light that throw out your previously expected profit result. Make sure you are up to date, always and no surprises when the Auditors come calling.

  1. Dust off your Financial Plan

How certain are you that you will be making profit next year,I mean really.

The economy is riddled with challenges, rising prices, cost of living and wage pressures, increases in electricity, the war in the Ukraine…the list is endless.

Your financial Plan must factor in all these shocks so your business stays resilient and out in front.

Fail to Plan and you can Plan to Fail is an all-too-common catch cry.

Do you know that 2 out of every 3 businesses fail after 3 years due to a lack of planning.

A sound Financial Plan targets next years revenue and expenses.

What sales are you going to achieve next year, realistically and at what price can the market afford. Remember without a sale you have no business, so you need to get this right. How much money do you need to spend to make these sales – marketing, wages and overhead expenses like rent must be reviewed to ensure enough of a profit is being generated and as a business owner you are getting an appropriate return on your Investment.

  1. Hire a CFO

A CFO will make sure all of these things are done not only before EOFY but throughout the year.

You need to know how many sales you need each month before you break even and cover your costs.

You need to know what your cash position is going to look like in 6 months’ time so you can plan for and fund future growth of your business as well as making sure you have enough to pay wages each month.

That way you can sleep well at night, focus on what you do best, run your business and make sure you are all prepared and no longer work up a sweat over next year’s EOFY.

Chris Kondou is a member of the Virtual CFO Association.

The Virtual CFO Association is an elite peer network, advocating and promoting the emerging VCFO sector within the accounting profession. Collectively the association currently has over 600 years of industry experience, with highly qualified and experienced specialists spread across almost 30 industry verticals. If you would like any more information regarding the Association of VCFO’s, please visit our website www.vcfoassociation