Mind your business: four things to consider this new financial year

Most business sectors faced persistent challenges throughout the 2023/24 financial year, not least rising operational costs, sustained inflation, and low consumer confidence brought about by an increased cost of living. Although the business outlook is improving for the year ahead, pressures remain, and businesses will need to be on high alert to maximise revenues, and crucially, their profits. Now is the time to identify the areas where your business may be exposed, so you can make the necessary refinements and decisions where possible, writes Ross Boyd, founder and director of RBCA, a Belfast-based chartered accountancy founded in 2010.

Use existing business intelligence

Your business accounts for the past year should be considered an asset. By reviewing these you can identify trends, and most importantly the areas where change is needed or where change is coming. Beginning with labour costs, we know that this financial year will mean higher outgoings as the national wage rate has increased and supply of talent is restricted. Many businesses will have made the decision to pass this cost on to the customer, but not all businesses are able to do so and will have to account for it elsewhere. With that in mind, now is a good time to review your suppliers and assess if cost-saving changes can be made or the operating model can be developed. Similarly, it’s important to address your relationships with debtors and creditors putting in place clear payment terms that meet the needs of your business. It might also be in your best interest to consider a new budgeting style, defensive budgeting, for instance, means taking the most conservative approach to outgoings as possible.

Enhance processes and efficiencies

Efficient businesses are profitable businesses, and nowadays in the technologically minded world we live in, it’s easier to automate certain tasks or processes, to free up resource or even reduce your costs. Payroll, rotas, marketing, can all be outsourced without huge investment, and whilst for some business owners, it may be a challenge to relinquish control in these areas, the benefits often outweigh the reasons for holding on. Automation can reduce your labour costs or allow you or your staff to focus on being more productive elsewhere in the business such as networking, or forward planning.

Invest in your team

Retaining talent is an ongoing challenge, but your team is your best asset. It’s important, particularly at this time of year, to assess your combined skillsets and identify where training and development is needed to ensure they continue to deliver results for your business in the long run. When everyone is working to their full capacity and using their strengths, it creates a culture of delegation and inspires proactivity, creativity, and commitment, all of which further improves business efficiency.

Your team’s combined value makes up a significant part of your intangible assets, alongside the value of your customer relationships, the value of your brand and culture, and the value of your systems and intellectual property. At RBCA, we’ve taught our team to be less-focused on income, and more-focused on our organisation’s overall value. This shift in thinking has brought a different perspective to day-to-day decision-making. And as a result, our headcount has grown by 25 per cent in the last two years, demonstrating our sustained value and position in our sector.

Turn to the experts

Sound business advice is priceless, and essential in helping you to navigate the current climate. Good accountants, for example, do not only offer guidance on business compliance and help you complete your tax return, they’re also trusted advisors that support you to analyse your business and your assets so you can understand any inbound risks facing your sector, and unlock opportunities for long-term wealth generation and management. An advisory partner will fully understand your commercial position and be invested in your success.

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