Derek Mair, partner at Hall Morrice LLP
Whether its losing weight, exercising more or quitting smoking, the new year is the time when we love to promise ourselves we’ll get fit and healthy.
And being a business owner is no different. The new year provides the perfect opportunity to assess where your business is and how you can help get it into shape.
He said: “January is a great time of year for business: you can start with a clean slate and it’s likely that you will be approaching work with renewed enthusiasm following the festive break. Now is the perfect time to commit to making changes.
“We often see clients who have been doing the same thing year in and year out and achieving the same results. If you have no plans to expand the business from its current position, then there is absolutely nothing wrong with that.
“However, if you want to get ahead then you should start looking at what your company needs, and what actions you can take to ensure it finishes the year in the best possible financial health.”
Derek has made a list of his top five New Year’s resolutions that business owners should commit to in 2018. How many of them will you be making?
New Year’s resolution number 1 – Don’t be late
“A company will have the same deadline date for their tax return every year – 12 months after the accounting period it covers - and the accounts also have to be filed with Companies House nine months after year-end. The January 31st deadline for self-assessment is also well known, yet people always seem to leave things to the very last minute.
“There is nothing to be gained by taking it to the wire – indeed there are penalties for being late - and if you don’t act quickly enough you may not leave enough time for your accountant to rectify any errors or react to problems. We also see the same timing issues with VAT returns.”
New Year’s resolution number 2 – Meet your accountant
“Tax legislation never stands still and changes emerge every year. Make an appointment to see your accountant before your financial year-end. It’s their job to help you mitigate against tax and ensure your business operates in the most tax efficient way.”
New Year’s resolution number 3 – Make plans
“When you’re looking for capital to start up a business, or need to refinance to expand, the bank will want to see a business plan and financial projections. Once the funding is approved, the plan often gets tucked away in a drawer until the next time there is a requirement for one.
“A business plan should be a living document that is continually monitored and adjusted. When was the last time you looked at your business plan to see if your company is performing as you hoped and achieving what you wanted?
“Start the year by making a new plan based on your current position, map where you want to go and review it regularly to make sure you are on course to meet your objectives.”
New Year’s resolution number 4 – Invest in staff
“One of the first things you should do in January is to look at your current pool of staff and the skills that they have. Are any changes being made in your sector for which they will need training? Or are you planning on implementing new systems within your own company?
“You should start the year by forecasting what you will need from your staff, then identify gaps and set up a training budget. You should then allocate training courses to those who require upskilling, ensuring that the timetable doesn’t impact on operational commitments.”
New Year’s resolution number 5 – Keep up to date
“Technology moves at an incredible rate, and you should resolve to better manage your IT infrastructure. Although plans for Making Tax Digital (MTD)
“So, take a look at your current systems and consider whether moving to the cloud, for example, could help streamline operations. I think it would be fair to say that many sole traders are still very paper-focused and they should consider whether IT would help their business. After all, the better the record keeping, the less time the accountant has to spend unravelling it.”