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July Financial Improvement Checklist

We're halfway through a financial year which makes July a great month to review past performance and plan for the rest of the year.

1. Prepare a budget plan for your business

Setting financial goals is one way to keep focused on the important business areas for success.

How to prepare a budget plan

  1. Review the operations and financial results from the last 6 months and prepare an analysis of strengths, weaknesses, opportunities and threats (a SWOT analysis).

  2. Make a list of what you would like your business to achieve by the end of the year

  3. Prepare action plans for each item on your list and allocate responsibility and timing for completion of each action – use our one page action plan template below for guidance.

  4. Create your business budget.

When compiling your business budget plan:

  • research your industry to spot trends and opportunities to grow your business

  • involve your staff as they may have suggestions for improvements – if they're involved in the development, they'll be more likely to support any new plans 

  • take a critical look at your financial results and identify areas for improvements in income and expenses – calculate financial ratios to measure your financial performance.

Use these tools to help you: One page action plan | SWOT Analysis | Financial statements template

2. Prepare a profit and loss budget

A profit and loss budget is the future financial plan of the business. By preparing a budget you can see if the plans you have for your business operations will be financially viable.

How to prepare a profit and loss budget

  1. Review the approved budget plan from step 1 and note all required activities for the budget period.

  2. Review profit and loss statements from the last 6 months (you can even review further by month/quarter)

  3. Use our financial statements template provided below – or use your own – and prepare the profit and loss budget for the selected period using all the steps listed above.

When preparing your budget:

  • identify and document all assumptions you've made for the budget period – this will be useful when you compare actual to budget expectations

  • set your budget results to match your financial reporting – we recommend preparing your financial statements monthly so your budget should detail monthly financial expectations

  • regularly monitor your budget to actual results – this will enable you to see if there are problems and take quick action to ensure your business plans will be achieved.

Use these tools to help you: Financial statements template

3. Prepare a cash flow forecast

A business can be profitable but still experience cash flow issues. 

That's why it's important to focus on managing cash flow at all times. Preparing a cash flow forecast when reviewing and updating business plans will ensure you have enough cash to support these new plans.

How to prepare a cash flow forecast

  1. Using your business plan and profit and loss plan from steps 1 and 2, prepare a sales forecast – be sure to include information about when receipts from customers will actually be received.

  2. Prepare detail on any other estimated cash inflows, such as sales of assets and loan funds.

  3. Prepare estimated cash outflows, including the timing of when these will actually be paid for e.g. salaries, monies owed to suppliers, loan repayments etc.

  4. Prepare a cash flow forecast using all this information.

When preparing and monitoring your cash flow forecast:

  • be as accurate as possible on the timing of the cash flows

  • regularly compare your cash flow forecast to actual results including bank balances – you'll be able to spot problems and quickly act to ensure your yearly business plans are achieved

  • once the forecast is completed, compare some 'what if' scenarios to measure how your business cash flow will react to certain changes of events – such as decrease in sales, increase in fuel costs

Use these tools to help you: Financial statements template

4. Complete staff reviews

Performance reviews and appraisals help employees know how they've been doing in relation to the goals and requirements of their roles. 

Reviews also provide an insight into what further development or training staff might need.

How to complete staff reviews

  1. Set dates and times with each staff member to discuss the review.

  2. Use a standard template such as our performance and development agreement template below to make notes and discuss with each staff member.

  3. Make sure each staff member agrees to the goals set and provide them with a copy of the discussions.

When preparing for staff reviews:

  • set Key Performance Indicators (KPIs) for each staff member that align with overall business objectives

  • remove the prospect of a discussion about pay – the employee should be thinking about the work itself

  • remember to recognise the good work that staff do – any weaknesses or problems should be discussed, and solutions should be identified together.

Use these tools to help you: Performance and Development Agreement Template

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