It is that time again – EOFY.

From the escalation in pings from my advertising apps business owners are starting to think about the year that has gone and what the year ahead will hold; preferable prosperity and a sense of achievement. However this is not something that can be achieved by wishing alone. Management and focus play a vital role in achieving your business goals and objectives.

Before you look forward you need to understand where you are. The best summary of your business activity is your business’ finances. Not only do they provide you with a detailed state of where you are at, when utilized and leveraged effectively they can provide you with invaluable information you can use in driving your enterprise forward.

Often the drive to attend to your finances is motivated by the ATO’s requirements. Sole traders will need to have their financials sorted and lodged by the end of October, while Pty Ltd companies will have until mid-April to lodge.

However why wait ten months let alone three to find out how your business activities has fared during the past financial year? As a business owner you need to have an intuitive understanding of where your business is at and where you can take it long before the EOFY lodgment deadlines.

There are three main task that every business should be focusing upon, whether you are a sole-trader, a small company or a large corporation.

1. Update Your Books for the EOFY

This may seem obvious but the drive to complete this task should come from you the owner of the business and not an external government body. Having the actual results of the past years business activity close to the actual year end can provide you with valuable information upon the results of the decisions you made and strategies you have implemented. You can learn from your failures and successes of the past year and be better informed as the New Year begins, improving your chances of success as your drive your business forward.

So if you haven’t already begun, make the start to get your financial accounts up to-date.

2. Budget

Once you know where your business is at for the last Financial Year you can start making plans for the New Financial Year.
Preparing a budget forces you to envision where you want to be at the end of the new financial year and how you plan to get there. Usually this process is conducted in the months leading up to the EOFY however it is very easy to get caught up in the momentum of the day to day running of your business and lose track of time. Now is a good enough time as any to get planning.

What method should your budget take?

The best method is the method that works for you. The key is to develop a budget that you will use and will help you to improve the management of your enterprise.

For some entrepreneurs it may be a simple document with a list of strategies and goals outlining expected costs and possible revenues. For others it may be a detailed report containing a business plan with a set of steps and action items along with a financial report detailing the expected results.

The method is not important. The importance of preparing a budget is to force you to look forward and document how you plan to move from where you are now to where you want to be.

3. Measurement

As you progress through the year you need to monitor how you are going in respect to your expectations. Not only will this keep you on track but it will help you to learn the mechanics of your enterprise and how to avoid pitfalls and manage it successfully.

You should bring your books up to-date at the end of every month. Once you know your actual activity you should then measure this against your expectations – your budget. Discrepancies should be highlighted and investigated. With this information to hand you are then better equipped to make the necessary decisions to keep your business activity on track and in line with your expectations or maybe realign your expectations along more realistic goals.

The objective of measuring your business activity is to control the direction your business is taking and to reach your vision. By undertaking this task throughout the year you have a better chance of reaching the goal you envisioned at the start of the year.

Today is a better time than any to get started on these three tasks as they are centered on management of your enterprise’s most valuable resource. CASH!

Over the coming weeks and months I will be posting more about the premise of Zephyr Management Solutions, along with strategies and tips on how to successfully manage cash in the small business enterprise. Look out for these posts and in the meantime I wish you well in all your enterprising endeavors.

Written by Debra Cooper, 

Zephyr Management Solutions – making small business management a breeze.