Seven New Year’s resolutions for your business

Create or review your cash flow forecast

A cash flow forecast is one of the most useful financial tools for business owners. It shows you how much money you have coming into your business and how much is going out.

The forecast will help you understand if your business has capacity for growth, or if you need to take action to plug any cash flow gaps. It is also useful when seeking funding from a bank, alternative lender or investor.

A new year is a good time to create a cash flow forecast for the 12 months ahead. If you already have one, review it and make sure it’s accurate and up-to-date. An accountant can help with your cash flow projections.

For detailed advice on creating a cash flow forecast, read our guide.

Consider your bank account

Are you sure you’re getting a good deal from your business bank account? Use the excuse of a new year to check.

Your circumstances might have changed since you first opened the bank account, and it may no longer be the best option for your business. It’s possible that the bank fees you need to pay have increased or you might be able to find a cheaper alternative.

Do some research by looking at business bank account websites and using price comparison services.

Review your business plan

Now is a good time to revisit your business plan.

The challenges of the current cost of living crisis could mean you need to make additional adjustments such as reducing costs or making plans to sell your products or services in new markets to make up for reduced sales elsewhere.

Consider everything in your business plan such as cash flow and sales forecasts, business operations and marketing strategies.

Check that your plan is accurate and up-to-date. Go through your goals and key performance indicators to decide whether they are still realistic. While you might need to reduce some targets, there could be new business opportunities you’ve spotted that you can add to your plan.   

Consider your need for business funding

It’s essential that you have enough money to keep your business going or to fund new growth, so use the new year to consider whether you need to take any external finance on board.

You have lots of business funding options including business loans from traditional and alternative lenders as well as government initiatives such as Start Up Loans and the Recovery Loan Scheme. Depending on your needs, you could also opt for an overdraft facility, credit cards, grants, angel investment or crowdfunding.

Before you apply for any funding, be completely clear as to why you need it. It’s not advisable to take on funding if your business doesn’t really require it.

If you decide it’s a route you want to go down, work with your accountant on formulating a watertight business plan which will give you a better chance of your funding application being accepted.

Do your tax return

With the self assessment tax return deadline on 31st January, it’s a good idea to commit to doing it early and not waiting until the last minute.

Leaving it late can lead to errors and you missing out on tax reliefs you’re entitled to. It also boosts your cash flow planning and means you’ll avoid penalties for filing your tax return late. You’ll be hit by an initial £100 filing penalty and if your tax return becomes more than three months late, it’s £10 daily penalties up to a maximum of £900.

There’s a guide to filing your tax return here and more advice on the benefits of submitting it early here.

Reduce your tax bill

While it might be too late for your latest tax return, use the new year to plan how you can reduce your tax bill next time around.

There are various tax planning actions you can take to make savings including employing your spouse in the business, getting research and development tax credits and claiming household expenses if you run your business from home.

Tax legislation is complicated and it’s easy to make mistakes. Seek the advice of a professional accountant who can advise on what you are legally entitled to.

Automate your accounting

If you haven’t yet embraced digital technology when it comes to managing your finances, a new year is the perfect time to do it.

Research by YouGov found that a quarter of small business owners admit to losing an average of 10 hours per week on administrative tasks.

Using digital tools helps boost your productivity and slash the amount of time you waste on admin tasks by letting you stay on top of your business finances from wherever you are and from any device. They also help you to automate the sending of invoices and expenses, chase late payments and comply with the Government’s Making Tax Digital requirements.

To help businesses benefit from digital tools, TaxAssist has partnered with accounting software companies Xero and QuickBooks and expense management tool Dext.

Give your business a head start today

Dedicating time to looking ahead will mean you will have a comprehensive plan in place for the coming months.

If you need help or advice with the financial aspects of running your business, call us on 01423 871 870 or complete our online enquiry form.

Date published 4 Jan 2023 | Last updated 20 Mar 2024

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.