January may have come and gone, but that doesn’t mean it’s too late for you to start setting financial goals for 2023. After all, we’re still in the first quarter so you have time to lay down plans for a more successful year.
To help you get the ball rolling, we’ve come up with a few smart goals for your business this year:
Eliminate excess spending.
If you’re thinking of expanding your operations this year, you will need to review your budget and determine which expenses you can do without. Business expansion costs a lot of money, and it would be a good idea to trim excess spending before you begin looking for funding options.
With the help of your accountant, determine which business costs to cut to improve cash flow. If you are a sole trader, a micro business, or a professional, you can:
- separate your personal expenses from your business expenses as co-mingling often leads to mismanagement;
- renegotiate your lease agreement; and
- review your business utilities and discretionary expenses and weigh whether these expenses helped your business grow in the past years.
You may also need to monitor inventory and reassess your staffing situation. The latter is especially true for businesses that are affected by seasonality. If you fall under this category, consider reducing the work hours of underutilized staff. You can also automate all repeatable tasks and outsource any non-essential business processes.
Improve your financial tracking process.
Avoid putting financial tracking tasks on the back burner. Although filing receipts and listing daily expenses might not seem urgent or exciting, they are necessary for meeting requirements for business taxes and other financial reports. Plus, updated and well-organized financial records help you generate more accurate cash flow projections so you can make better decisions for your company’s bottom line.
A well-oiled financial tracking process enables you to forecast your finances and find ways to cut your business costs, all of which can help your business achieve long term goals. In addition, a great tracking system will help you secure business loans that can finance your plans to grow your business this year.
Maxine Stern, volunteer mentor for Chapel Hill-Durham SCORE, told business.com that without financial tracking, “you will have no idea of whether you are making a profit or have a loss. I’ve had clients who think they are making a profit but, for various reasons, didn’t see they were losing money. If they were tracking expenses, they would have noticed.”
Create a detailed debt collection plan.
Aim to be debt-free this year by creating and following a detailed debt collection plan. No matter how insurmountable your accounts receivable might seem, this plan will help you slowly but surely get your clients to pay off the outstanding invoices, improving your cash flow.
When you do your debt collection in-house, it is ideal to assign a dedicated staff or team to maintain records of outstanding payables and do the collections religiously so that you can recoup money fast. Bad debts can also impact your business negatively as it is an item that does not help your business’ bottom line.
If you can’t afford a dedicated debt collection staff, it is wise to outsource your debt collection process to a third-party agency as part of your debt collection plan, as in the case of Trucap hiring Slater Byrne as their third-party debt collector. Debt collection professionals who know the ins and outs of the industry and can give your staff more time to focus on tasks that are revenue-generating.
Keep in mind that your financial goals are only as good as your commitment to achieving them. So, make sure you do something to reach the targets you set.
Remind yourself and your team of your goals throughout the year and revisit them periodically so you can track your progress. Of course, don’t forget to celebrate your victories and reward yourself for every goal you achieve.
Liam White joined the Slater Byrne Recoveries team in early 2013. He has worked across the credit & dispute resolution industry for a number of years. He is currently working in a Marketing/Head of Sales capacity at Slater Byrne Recoveries.