New financial year: 4 business finance hacks for success
Happy new financial year everybody! It’s been quite a ride during the financial year 2020-2021. Between post COVID-19 recovery and recurring lockdowns, the business world has been turned upside down.
But, with every chapter that closes, a new one opens. And we are ready to take on the new financial year and make it one to remember (not for the COVID this time)! As you’re getting your business ready for the new financial year ahead, you might be wondering what small business finance hacks you could implement to maximise your business’s success.
Here are 4 business finance hacks for success this new new financial year:
1. Forecast for growth
While COVID-19 can make it harder to forecast your business’s turnover, it’s important to plan ahead as much as you can. Instead, focus on the parameters that you can control. For instance, are you planning on expanding your business into new markets? Or do you want to introduce new products or services? Whatever it might be, the start of a new financial year presents the opportunity to think big and forecast for growth.
If you are looking for a trusted partner to provide you with the cash boost you need in order to achieve your business goals this new financial year, don’t hesitate to get in touch with our team at Lumi.
We specialise in providing small businesses with fast access to flexible funding that suits your business’s individual needs and circumstances. Are you considering a flexible business line of credit to boost your cash flow on an ongoing basis? Or simply need a buffer for contingencies? Are you planning to apply for a small business loan to get funding for a big business purchase? There are many different business finance options available, so feel free to reach out via email@example.com or call us on 1300 00 5864 to discuss your options.
2. Increase the budget buffer
It goes without saying that having a solid budget is part of any business’s new financial year planning. But with the increasing uncertainty due to COVID-19 and other uncontrollable influences, it’s important to add an extra buffer to your budget for contingencies. Check out the government’s handy tutorial on how to create a budget for your business.
The budget should include information on your turnover as well as your business expenses and provide you with a revenue target. You can then also calculate how much money you will be able to spend across different business functions. How much budget can you spend on marketing vs. technology, operations, business purchases etc. It can also provide some insights into how much profit you can forecast. Last but not least it can also help identify any gaps for where you might need additional business finance in order to achieve your goals.
3. Automate your business finances
If you haven’t already automated your business finances using one of the accounting softwares, you might be missing out. This kind of handy accounting software can help you simplify your business transactions. It can integrate important services such as your bank account or ATO. If you work with an accountant or bookkeeper, you can check with them about the different business accounting software options available.
Whether it includes the management of your budget, bank transactions, invoices, paying bills or staff. Having such a one-stop-shop system for all things business finance related can be a massive game changer that will not only save you time, but also money. And here’s why. You can get a better overview of the ”bigger picture” at a glance. So you can take action as soon as you notice that some invoices are late or payments are about to be overdue for example. It’s not only a more efficient way to manage your cash flow, but it can also help improve or maintain your creditworthiness.
This becomes especially relevant if you are planning to apply for business finance in the future. Your creditworthiness, including your credit score, which is partly based on managing debt effectively and paying your bills on time. All of these factors contribute to a lender’s assessment of your risk profile.
4. Review your payment terms this new financial year
At the start of the new financial year it’s the perfect opportunity to review and potentially update your payment terms to suit your business’s individual needs. Especially since you’ve already updated your budget and forecast. This can put you in a much better position to understand what sort of payment terms your business requires for optimal cash flow.
For example, that 28-day payment term you might have currently in place could be too long and impact your business’s cash flow negatively. Especially if you have an increasing amount of business liabilities with shorter payment due dates. As with everything when running a small business, it’s a constant jungle of managing incoming vs. outgoing payments in the most efficient manner. Check out the government’s guidelines on standard payment terms and always make sure to run any updated legal documents past your lawyer.
If you’re looking for additional business finance to boost your cash flow, apply online in less than 5 minutes here. In case you’re unsure about how much you can afford to borrow, check out our handy Business Loan Calculator.
Now, what do you need to get started with your online business loan application? Good news, it’s a very simple and straightforward process that only requires 3 things to start with:
A valid ABN/ACN
Business in operation for at least 6 months
$5K per month min. turnover
We’re looking forward to helping your business grow this new financial year. It’s always our main priority to understand your business’s needs and circumstances. Our aim is to provide you with the best possible funding solution tailored to your business. On top of that, you will receive a lending decision within 2 hours after applying online. Provided that you give us all the required information, the funds could even be in your bank account on the same business day.
Your Lumi team