New Financial Year Resolutions

For most businesses in Australia a new financial year has just started.  Whilst still under the cloud of the Covid-19 pandemic, some businesses are thriving and others are struggling with both lockdowns and ongoing threat of further lockdown.

Regardless of which circumstance applies, it will be worthwhile considering whether your business should be making any new financial year resolutions.  Beyond some broad and high level aspirations such as ‘make more money’ or ‘start making money’ depending on the stage of business you’re in, here are some other considerations to make.

Digital Transformation

The Federal Government is keen on continuing and accelerating its own digitisation process.  Do you need to do the same?  Are you leveraging enough from software and automated processes to increase the efficiency of your operations and reporting?  All businesses will have some aspect of their operations that could benefit from digitisation and modernising.  A sample of these things includes:

  • Proposals, business development and customer relationship management
  • Inventory management
  • Expense recording
  • Expense claims and approvals
  • Banking payments
  • Payroll and employee management
  • Point of sale systems
  • Invoicing and debtor management
  • Budgeting and KPI tracking and reporting
  • Website, online presence and social media engagement

Sustainability

Does your business and/or business premises need an upgrade to enhance energy efficiency?  This will be particularly relevant for established businesses.  Options for a smaller carbon footprint include solar panels, LED lights, improved irrigation or new more efficient manufacturing equipment.  For commercial premises it can also include thermal efficiency of the building itself, through better windows and airflow management.

With the Federal Government implementing an immediate tax write-off for new asset purchases for most Australian businesses, now is a great time to consider an energy efficiency upgrade.

Growth or consolidation

Does your business need to grow and take the next steps and if so, does that mean more personnel, more equipment or more marketing and promotion?  Alternatively, has the business been undergoing a growth phase which requires assessment and management to make sure it can sufficiently fund the growth without too much debt?

Whether it is growth or consolidation, is this consistent with what you planned a year ago?  Furthermore, do you have reliable enough reports to know where things are at?

Reporting upgrade

Does your business have too few reports, or too many?  Do they have the right balance of financial and non-financial information and KPIs? Are they timely enough?  If your business has been around for many years, it could be using an outdated system and could be taking too long to summarise and report on the key information and metrics.

Here are some tips on building management reports:

Succession

Is this the year you need to get out, in one form or another and just as importantly, have you been planning for it?  Succession can involve selling the business on the open market, merging with a competitor with an exit plan, or bringing in new owners with a view to having a staged exit.

If you’re looking at selling, is the business in the best saleable shape?  Again, do you have reliable reports that can demonstrate what it’s worth and where further potential is?  Is it running efficiently as possible, or could further digitisation help with getting ready for sale or handover?  If sale is due to retirement, then it’s obviously important to maximise the sale potential now.

Further information on the value of succession planning is here:

Holidays and downtime

Is it time to fit in a break, either for yourself or your workforce?  Holiday options have been slim pickings for the past 18 months now, but that doesn’t mean people shouldn’t take some time to ‘get offline’ and refresh mentally.

Government assistance

These are just some of the areas worth considering as part of new financial year resolutions.  For some businesses there could even be Government support available to implement changes.  The Victorian Government has a variety of grants and programs for businesses of various sizes that cover some of the considerations mentioned above and other State’s will have similar programs.  The Victorian website is here: https://business.vic.gov.au/grants-and-programs

About the Author
Daniel Arnephy
Daniel is our technical expert for all your taxation needs. His diverse network and client base allows him to continuously build his knowledge and analyse every situation he is faced with an experienced outlook.
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