8 Ways To Improve Your Financial Management In The New Year

December 20, 2021
8 Ways To Improve Your Financial Management In The New Year

Are you looking forward to the coming year? Ready to hit the ground running as soon the clock strikes midnight and propels us into 2022. Although there is still so much uncertainty in today’s world, there are steps you can take to prepare and ensure your business is in order.

One of which is effective financial management, which is vital for business survival and growth. It involves planning, organising, controlling and monitoring your financial resources in order to achieve your business objectives.

Good financial management will help your business to make effective use of resources, fulfil commitments to your stakeholders, gain a competitive advantage and prepare for long-term financial stability.

You might feel at times that your finances are complicated and confusing but the following 8 top tips should help you to gain control of them.

1. Follow or amend your business plan

Back to the basics, are you following your business plan? Your business plan is what establishes where you are and where you want to get to over the next few years. It details how you will finance your business and its activities, what money you will need and where it will come from. Remember, you can always review and amend your existing business plan or create a completely new one. See this article for more information.

2. Monitor your financial position, and save time and money by using market-leading software to manage cash flow

As you know, you should be regularly monitoring the progress of your business. In the new year make it a priority to check the following on a daily basis, how much money you have in the bank, how many sales you're making and your stock levels. You should also review your position against the targets set in your business plan on a monthly basis. Better yet, why not use Airbank’s all-in-one finance tool to manage your finance. Try Airbank for free.

3. Review and remind your clients about payment terms

New year, same problems. Businesses can run into major problems because of late customer payments. To reduce the risk of late or non-payment, you should make your credit terms and conditions obvious from the outset, but there’s no harm in sending a gentle reminder to your customers about your payment conditions. You should also quickly issue invoices that are clear and accurate. Try using a computerised credit management system such as Credica, this will help you to keep track of customers' accounts.

4. Invest now to protect your business against Cybercrime

Act now to invest in safeguards to manage the risks to your business. If you are attacked and the correct steps to protect against cybercrime haven’t been taken, you can incur a fine. You should keep software and operating system updated, use anti-virus software and keep it updated, and use strong passwords across your business. Try tools like enterprise-fit password managers like Heylogin, payment processing fraud identification like Riskified, or eCommerce fraud prevention tools such as seon.io. To insure yourself against cybercrimes, try using Beazley, plussimple.fr or mailo.de.

5. Review your data arrangements and make sure they are compliant with GDPR

All personal data must be managed in a safe and secure way, the GDPR will be enforcing this with large fines for breaches of the regulations. If you are part of the recruitment industry, there are additional changes to be aware of. If you’re not sure that you are 100% GDPR compliant,  then you can take a short test on eyalliance.org.uk to check.

6. Meet tax deadlines

Failing to meet deadlines for filing tax returns and payments can incur fines and interest. These are unnecessary costs that can be avoided with some forward planning. Keeping accurate records saves your business time and money and you can be confident that you're only paying the tax you owe. Therefore, it's important that you meet your obligations. This is important to communicate with your accountant. In our recent blog, we cover why accountants are crucial to any business.

7. Become more efficient and control overheads

Is your business operating at its most efficient? Saving energy and therefore money can happen by implementing changes in behaviour and using existing equipment more efficiently. It's one of the easiest ways to cut costs. Areas to look at if you operate from an office include heating, lighting, office equipment and air conditioning. As a recent Global Cost Management Survey by Deloitte found, as companies begin to recover from this pandemic, many will alter their business models dramatically. COVID-19 is boosting the focus on cost reduction strategies. Relative to pre-COVID-19 levels, the likelihood of undertaking cost reduction initiatives increased globally by 74% (28 percentage points). Two of three companies globally (66%) now expect to pursue cost reduction strategies over the next 12 months.

8. Tackle problems when they arise

It is always very stressful facing financial problems as a business, but there is help and advice available to help you tackle them before it gets too much to handle so seek professional advice as soon as possible. Free advice is available at Debtplan. There are also some initial steps you can take to minimise the impact such as tackling priority debts first.

To prevent any unwanted headaches you can start by assessing how you can improve your cash flow management by utilising Airbank’s all-in-one finance management tool. Airbank is a unified financial management solution that marries your bank statements to generate your cash flow statements automatically. That way you don’t have to go through the messy process of waiting for your accounting statements, or transferring and categorising all your transactions yourself.

Airbank allows you to connect your bank accounts, which auto-categorises all your historic transactions. In addition, you can also initiate new payments and have them categorised for your cash flow statements from the get-go as well. Airbank then produces your direct cash flow statement for you in real-time and even lets you input your cash flow forecast numbers in the spreadsheet based on your planned billings.

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