New tax year – time for a spring clean!
It’s April which means that spring is finally around the corner! April also heralds the start of a new tax year and also the start of a new financial year for many businesses. Whatever April 6th means for your business, the dawn of a new tax year signals a fresh, blank page. For the majority of business owners, the start of a new tax year is mainly a formality; involving accounts and administrative activities such the implementation of new tax codes and finalising accounts for the previous 12 months.
On the ground, there is often little that will actually change in the day to day course of your business. However, just as the start of a new calendar year often triggers people to think about making a fresh start and making resolutions to improve your behaviours and circumstances, so too can the start of a new tax year. Certainly I like to think of the start of a new tax year as an opportunity to bring in new ways of approaching the way you run and look not only your accounts, but also the wider business.
Here are 4 things to consider to help start the new tax year off on the right foot.
Business health check A great way to start a new tax year is to give the business a thorough health check. The start of the new tax year also signals the end of the previous year. This gives the ideal opportunity to reflect on the past year’s activities, comparing the outcomes with previous years. Take time to review your accounts with your internal accounting team or external auditors. Where possible, break down your account into meaningful sections to allow you to dig deep into the various aspects of your business. Don’t just take the figures at face value – probe and ask questions to ensure you fully understand the in’s and out’s.
Regular review and goal tracking Something that I always try to instil in clients is the importance of continual review. Whilst the start of a new accounting or business year is a good milestone to make comparisons with previous periods, monthly reviews can also be enlightening; sometimes revealing very interesting seasonal patterns. Getting into the practice of setting monthly goals and tracking the business’ performance against them is something I have also found to work extremely well with clients across all sectors.
Time to start over? On 6th April the clock ‘resets’ for tax allowances, ISA savings and numerous other measures/allowances. What aspects of the business should you look to start over? Identifying areas of weakness is often fairly straightforward – business owners are usually aware of these, carrying doubts about certain aspects of their business but failing to find the right time or impetus to make the changes needed. The start of the new tax year provides both and is therefore the perfect time to act on those worries that keep you awake at night!
What is working well? Whilst there may be many areas in which you can improve your processes, it is also important to highlight what the business is doing well so these actions can be replicated/strengthened. If positive aspects of the business relate to an individual member or teams of staff, take the time to show your appreciation.
Whilst at other times of the year there is often an excuse – ie. ‘we can’t change the way we do it now because it will skew things for the rest of the year’ – the start of the new financial year gives a blank canvas; allowing positive changes to be brought into place.
For further help and advice about spring cleaning your business’ accounting practices in order to yield positive performance results, please get in touch.