As a business owner, reviewing the lows and highs of your business in 2021 is important for establishing appropriate business goals and a strategy for 2022. Here are the top 5 accounting resolutions that you can consider implementing.
- Review your business targets as well as budgets
The very first accounting resolution that you should consider taking is taking out enough time and energy to review your business targets. Not just that, it’s also important to dedicate time to reviewing budgets. Reviewing your business strategy is one of the most important financial resolutions one can take. Identifying your financial targets and the budget you’d like to invest in your business are also key components of figuring out your business strategy. By focusing on these fundamental aspects of business, you will be able to identify various opportunities. These opportunities will drive growth and help you identify potential obstacles and problems
2. Improve your credit rating
In the process of applying for business finance, an impressive or at least substantial credit score is pivotal. Why? It can improve the eligibility of your business across a wide variety of products and increase your chances of running a successful business. From a causal point of view, your business’s credit score has a direct impact on how much interest you pay. A bad credit score can also potentially reduce your eligibility for business finance. Here are some ways in which you can improve your credit score:
- Identify your credit rating by contacting a CRA (credit reporting company) for your credit report.
- Ensure that the CRA conducts a soft check so as to not affect your credit score.
- Try to ensure that your financial obligations are fulfilled in a timely manner.
- Establish credit by taking out a business loan or business credit card. This is useful for establishing a credit history.
- File your business accounts on time and promptly.
- Try to minimize your credit utilization as it is a fundamental determinant of your business credit score.
3. Identification of key deadlines and tax dates for 2022
One of the most effective ways to have a good grasp over your accounting resolutions for 2022 is by staying ahead or on top of important dates and deadlines for tax payments. Try to mark all the important tax dates early in 2022, on your calendar. If you file your tax returns post the deadlines, it could cost your business. Tardy tax return filing could result in you having to pay interest charges and penalty fees.
In case you find yourself in a situation where you think you won’t be able to pay a certain tax bill on time, make sure you contact HMRC. You may be suggested by HMRC to pay the tax bill in instalments. This particular arrangement is referred to as the Time to Pay arrangement. If you don’t live in the UK, contact the relevant governing body for such issues. Consult your accountant to get access to the latest rules, regulations, and other relevant information.
4. Managing your debt effectively is crucial
Although it may be difficult to believe, debt is potentially a fantastic way to introduce greater working capital into your company or business. It can potentially improve the cash flow of your business. But this is subject to the condition that the debt is managed efficiently. It is not at all unknown or rare for business owners to have some sort of debt. Debt can be in the form of revolving credit facilities, business credit cards, secured business loans, unsecured business loans, merchant cash advances, or asset finance.
To effectively manage your business debt, start off by identifying and reviewing the debt(s) you have. After this, figure out the interest rate at which you’re paying off your debt. Calculate how much debt you still have to pay off. With all this information, you have the power to explore several refinancing options. Refinancing debts can facilitate the possibility of lower repayment costs. Therefore, you will have more cash in hand.
5. Have a precise and comprehensive understanding of all your funding options
Working capital or adequate working capital is fundamental for all successful businesses. So, to ensure that you have adequate working capital, it is imperative to explore and identify good funding options. Before exploring funding options, it’s best to have a clear vision of your business goals and strategy for 2022. Once you’re well aware of your business goals, you can easily understand whether you’ll need additional funding. If so, how much additional funding do you require?
Having a good grasp of your business finance is pivotal to actualizing business growth in 2022.