By James Pinchbeck, Marketing Partner, Streets Chartered Accountants
Not to be confused with the tax year-end which is 5th April each year, the year-end date for your business is specific to you. The largest proportions of businesses tend to opt for either a 31st December or 31st March year-end.
Typically, most businesses, when it comes to their year-end will focus primarily on finance and financial reporting, with Directors, owners and shareholders keen to know the financial outcome. Those charged with financial reporting will both be considering the preparation of financial statements as well as any potential financial year end planning. This for many is often a task carried out hand in hand with their external accountants or auditors and tends to be a process which aims to:
- Assess the level and treatment of potential profits
- Attempt to reduce the overall potential tax liability
- Review capital expenditure and maximise the use of tax allowances
- Consider tax efficient remuneration and pension contributions for directors/owners
- Consider bonuses for staff and directors (actual payment may be made up to 9 months after the year-end)
- Consider the basis for profit extraction including dividend payments
- Review directors' loan accounts and act on these as necessary
- Consider and influence the timings of transactions
- Review and consider catching up with revenue expenditure (e.g. maintenance, mileage claims, etc)
Given this back ground, it is perhaps highly understandable that less thought may be given to perhaps the equally important matters at the end of one business year and the start of the next. Seemingly more and more organisations seem to plough on year on year, with little or no time to consider or reflect on passed activity and its impact on future performance.
What might a business want to consider or look back on over the last 12months and why?
Amongst the points perhaps worthy of consideration are the following:
People
How have your team performed? Have you experienced labour and skills shortages? Have you had a challenge recruiting and retaining staff? Have you seen increased staff absences? Do your staff feel valued? Have you faced increased pay pressure? Have you looked to make changes and introduce new process or practices and how successful have they been?
Customers
Have you grown your customer base and sales in line with expectation? Have you entered new markets or developed new products or services? Have your improved your customer experience? Have you improved customer retention and advocacy? How has your sales or business development team performed? How has your marketing responded to business changes and opportunities as well as changes in marketing activities?
Processes and practices
Have you introduced changes or new business processes or practices? Have you made changes to products or services? Have you invested in digital process and practices? Have you addressed any headaches or long-term business issues?
What is your business feel good factor?
The points or questions raised are certainly not definitive or exhaustive. Each business no doubt will have its own aspects to consider which will more likely than not be dependent on the nature of the business, the market in which it operates and its own unique situation.
Finally, perhaps the question all might ask themselves is how do we feel about the business today as opposed 12 months ago? On the basis surely most would like to feel better about the business, being better will be dependent on who you are and what your role is within the business.
As you start a new year it might be worth benchmarking your next 12 months against individuals’ thoughts on what will or could make the business better and even more successful.
