As the end of the financial year approaches, it’s essential for finance teams and CFOs to start thinking about how to prepare for the year ahead.
By reviewing past performance, setting new goals, and putting the right processes and systems in place, you can set your organisation up for financial success in the coming year.
Here are some tips on how to get started.
Review the past year’s performance
Before you can start planning for the future, it’s important to understand where your organisation currently stands.
Take the time to review your financial statements, including your income statement, balance sheet, and cash flow statement, to identify any trends or areas for improvement. Ask yourself questions like:
- Did we meet our revenue and profit goals?
- Did we stay within our budget?
- Were there any unexpected expenses or revenue streams?
- Did we experience any cash flow issues?
- Were there any significant changes in the market or industry that affected our performance?
By answering these questions, you can identify areas where you may need to adjust your strategy for the coming year.
Set new goals
Once you have a clear understanding of your past performance, it’s time to start setting new goals for the coming year. Make sure your goals are specific, measurable, achievable, relevant, and time-bound (SMART). For example, you might set goals like:
- Increase revenue by 10% over the next year
- Reduce operating expenses by 5%
- Improve cash flow by reducing accounts receivable ageing by 30 days
Remember to keep your goals realistic and aligned with your organisation’s overall strategy and values.
Put the right processes and systems in place
To achieve your goals, you’ll need to have the right processes and systems in place. This might include:
- Updating your budget and financial forecasting models to reflect your new goals
- Updating your financial management system
- Streamlining your accounts payable and accounts receivable processes
- Improving your inventory management processes
- Hiring new staff or training existing staff on financial management best practices
Make sure you have a clear plan in place for implementing these changes, including timelines and responsibilities.
Communicate with stakeholders
Ensure that you’re regularly communicating with key stakeholders like senior management to keep them informed about your organisation’s financial performance and plans for the future.
This will give them the visibility they need to help guide your organisation in the right direction. Regular communication also helps to ensure that everyone is on the same page and working together towards achieving shared goals.
Consider setting up regular check-ins with key stakeholders or a monthly review meeting where you can provide updates on progress and any additional insights or recommendations. This will show them that you’re actively monitoring your organisation’s performance and taking proactive steps to keep it on track.
Stay agile and adaptable
Finally, it’s important to remember that the financial landscape is constantly changing.
Make sure you’re staying up to date on industry trends, economic forecasts, and regulatory changes that may affect your organisation’s financial performance.
Be prepared to adjust your strategy and goals as needed to stay competitive and successful.
Regularly upskilling and training your accounting and finance team is also a great way to stay abreast of the latest developments in the field.
By staying agile and adaptable, you’ll be able to quickly react to new circumstances or opportunities and make sure you’re always achieving your organisation’s financial goals.
Conclusion
Preparing for the financial year ahead requires careful planning, goal-setting, and communication.
By taking the time to review past performance, set new goals, put the right processes and systems in place, communicate effectively with stakeholders, and stay agile and adaptable, you can set your organisation up for financial success in the coming year.
