XeroCon: Finance Insights for Small Business Owners

Recently, I was lucky enough to not only attend but be part of a panel at XeroCon. It’s basically ComicCon for bookkeepers. Think numbers, data, industry leaders and a whole lotta fancy tech – be still my beating heart! I took a lot away from the event from finance macro trends to mindset and growth. Most pressing, of course, is how small business is faring post-covid and what you can do to get finance ready.

Post-Covid Times

We’ve knuckled down and endured lockdowns, shipping delays, a shonky economy and an apocalyptic world (minus the zombies) but what’s next?

In a nutshell, it’s a tricky time to navigate. While juggling staff levels and mandates was the new normal, purchasing stock, ATO debts and cashflow issues remain.

The prediction? We’re heading for a cash flow crunch. Inflation at record highs, late payments and seasonal slowdowns are having a big impact. While your bottom line might look nice and healthy right now, this may not be the case in six months should the post-covid scary times keep rolling. 

The advice is clear: prepare for cashflow issues.

Keeping accurate bookkeeping records now is more vital than ever if you’d like to access a loan or funding down the track.

Get Finance Ready

Cashflow issues can pop up at any time. As healthy as your business might seem, we’re still grappling with the aftershocks of covid. Smart business owners mitigate risk so do the work now so you have an ace up your sleeve.

If you *need* money in this climate (ie: a loan) it will be hard to obtain. Lending restrictions are tight and money is no longer cheap. I’ve rounded up the best tips from the panel at XeroCon so you can be ready now.

Consider Your Position

Before you take the leap to obtain finance ensure you have contemplated your business position as a whole. Being proactive is vital.

• Plan for growth now, so you’re not caught out later: increase your rates and prices (within reason) now and strategise how you will grow and increase capital within 6 months.
• Surround yourself with the right people: find trusted professionals to give you the right advice. Don’t drop a question in a Facebook group! Book a meeting with a financial advisor, tax agent or bookkeeper.
• Debt isn’t always the right answer: before you obtain finance, ensure you can meet your obligations and this won’t affect your growth in the future.
• Now is the time to be proactive and build a buffer: prioritise saving over spending.
• Consider your business model: do you need to change how you do business to remain profitable?

If you have sifted through your business and you’ve decided you DO need to obtain funding you’ll have a better chance if you have your ducks in a row. Ensure your financial records are up to date. Work with your bookkeeper to submit accurate profit and loss reports along with a robust forecast outlining the impact a loan would have on your future gains.

Your character will always be considered. Be professional and well organised. Ensure other liability areas are kept to a minimum and/or under control. For example ATO debt, late fees, credit cards and so on. Your accountant and bookkeeper can support you through this so don’t hesitate to reach out for support!

Manage Your Cash Flow

You know what they say, prevention is better than a cure. There are steps you can take now to manage your cash flow and avoid the dreaded cash flow crunch.

• Get your invoicing right: ensure you have strict terms regarding late payments and automate your payment reminders. 
• Use accounting software to keep accurate records and monitor your cash flow.
• Review your expenses and reduce costs where you can.
• Set up an automatic savings plan so you have a plan for difficult months.

If inconsistent cash flow is a recurring issue, you need to read this. I’ve outlined 5 things you can do now, in detail, to avoid cash flow issues.

Need more help?

If you’re looking for a bookkeeper who truly has your best interests at heart, I’m a click away.