April is the start of the new financial year. Are you thinking about getting your accounts in order ready for completion of your annual self-assessment tax returns? Whether the answer is yes or no, April is also a great time to reflect on the last year and review your figures.
Why should I review my figures?
Sitting down with your accounts might seem like a boring or daunting task, however, if you want to fully understand your business and how it’s performing, you need to look at the numbers.
What can my numbers tell me about my business?
The numbers can tell you a lot about which services or products sold well and which did not. You can see where you have made profits and losses and put actions in place to improve things. They can highlight which expenses cost you more than you thought and help identify unexpected ones. It also allows you to review expenses you might not need anymore, for example, a monthly subscription to two different social media platforms.
You will also be able to start spotting seasonal trends and variations. For example, January might be a slow trading month because people are cutting back on their spending having splurged in December. You can then think about what you can do to boost sales next time January comes around.
What questions should I ask of my accounts?
There are many questions you can ask and answer looking at your accounts. Here are a few to get you started.
- What services/ products did well last year, and can I do more of this?
- What services/ products didn’t do well last year? Should I promote them or replace them with something else?
- Which months did I make most sales? Which months did I make the least sales? What can I do to increase sales further?
- Have my expenses increased?
- How much did I spend on stationery? Do I need to spend this much next year?
- Have my suppliers increased their prices? Do I need to source a new supplier or increase my prices to ensure I’m still making a profit?
- How much profit am I making? Is it enough?
What goals should I set for my business?
Again, your business goals are up to you. Why are you in business in the first place?
- Is there a long-term goal you want to achieve? Then looking at your accounts can help ensure your business is on track to help you achieve this?
- Do you want a better work/life balance? Do you need to increase prices so that you can work fewer hours, but still make the same profit?
- Do you want to go on the holiday of a lifetime? Perhaps you need to promote your most popular products more so that you can use the profits to buy your dream holiday.
I need some help understanding my business numbers.
If you need some help understanding your business Numberstuff or have more questions about your finances, I offer a 1 hour 1:1 session. We can review your accounts together and I’ll answer any finance questions you might have as well as help you set goals for your year ahead.