2022 was a tough year for finances, with businesses and sole traders being impacted by the cost of living crisis.
But there are ways to make 2023 a better one. From adding important dates to the diary, to sorting out your pension. There are plenty of simple and actionable financial promises you can make yourself, that will help your business grow.
Here are six money goals to keep your business financially fit in 2023.
1. Keep your diary up-to-date
Never leave things until the last minute so you’re not up against a deadline and in a rush.
There are some things that affect us all and tax is a big one. VAT returns, annual accounts and self-assessment, along with any Companies House submissions and other official records, are all easy to plan into your calendar now.
And maybe you have licences or qualification renewals, plus memberships of professional bodies, trade associations and your Which? Trusted Trader ongoing re-assessment (ORA).
All these are much easier if you book a week or so in advance so you can find the necessary paperwork and details without a panic.
And have a think back to last year and any times you were rushed or stressed because something had to be done at once. Avoid those times this year by putting them in your calendar now and setting reminders.
- Find out more: six ways to keep on top of your self-assessment deadline
2. Save money on your vehicles
Owning or leasing vehicles and their running costs aren’t getting any cheaper.
Could you change vehicles, cut mileage, reverse insurance claims or change routes?
Take some time to review yours. This could be simple things like signing up for a fuel card with your most-used garage – you can easily get 10p off a litre.
But there are bigger questions too: can you reduce vehicle usage?
Telematics and route optimisation systems, used by the big courier companies, work out the most efficient routes to get drivers to customers quickly and efficiently. Would a system like that be appropriate for your business?
In addition to thinking about insurance well ahead of renewal, look at any claims made in the past few years and see if they can be avoided. That could mean physical changes to the vehicles or where they are parked or stored, or perhaps sending all – or at least some – of your drivers on advanced driver training.
You will also have insurance renewals, for your business and for vehicles. Shop around early and you might find a bargain or be able to secure better cover levels. Take what’s on offer in a rush and you could be paying over the odds for a worse policy.
- Find out more: car insurance reviews
3. Consider a software update
Growing businesses can outgrow their systems. And innovation and competition between providers can mean you are missing out on opportunities if you simply stick with the way you have always worked without looking at alternatives.
Work out where your bottlenecks are or how you could work more efficiently with a small investment in the right system.
There are a host of office systems and project management tools, such as Wrike or Trello, job ticketing creation and billing systems for managed service providers, such as Synchro as well as customer relationship management software.
Some packages come off the shelf and others can be personalised.
Even mainstream packages, such as Asana, allow highly-trained independent partners to create additional tools or modify their systems to tailor them to your needs.
Modern accounts packages such as Xero, combined with mobile phone and web-based receipt systems such as Dext, can make record-keeping and expenses easy. You might consider a system such as Go Cardless for automated bill collections.
Don’t upgrade or change for the sake of it, but many of these systems can simplify and streamline your routines.
4. Keep on top of accounting
Don’t leave invoices unpaid and consider revising your charging structure, billing cycle or payment options to reduce the risk of late or non-payments.
If you work on large contracts, consider using an Escrow account. This means you do not start work until the client has paid. Your client’s money is held by a third party and handed over to you once each phase of the contract is complete.
You should also review your accounting and book-keeping.
An accountant will not only complete your tax return, but also calculate your tax liability and file your return on your behalf.
If you are not happy with your accountant, don’t be afraid to change them and find a bigger firm if your business is outgrowing theirs.
You could also consider a bookkeeper, there are many freelance or agency bookkeepers who can do in an hour or two what might take you a day.
- Find out more: how to get paid promptly for every job you do
5. Cut down all your bills
Take a moment to look at your bills and work out how and where you can save money.
Earlier this month the government confirmed a new energy support scheme for businesses that will run from April - when the current scheme closes. This will provide less support than the current scheme, so it’s worth planning out what your costs could be.
From 1 April 2023 to 31 March 2024, all eligible non-domestic customers who have a contract with a licensed energy supplier will see a unit discount of up to £6.97/MWh automatically applied to their gas bill and a unit discount of up to £19.61/MWh applied to their electricity bill. The discount will be applied automatically.
You should read up about the new scheme here.
You may also be eligible for tax breaks and grants to help with energy costs.
You may be able to make small changes to save money, such as putting lights on timers and switching bulbs to LEDs, which are cheaper to run.
It may be worth considering if it’s worth investing in insulation, solar panels or a new heating system. Although this will cost money, it may save you money in the long run.
- Find out more: 17 ways to cut down on your household bills
6. Sort out your pension
If you're still a way off retirement, planning how you'll fund it might not feel like a priority amid a sharp rise in the cost of living.
But taking simple steps now can help set you up for a brighter financial future.
Our 2022 research suggests that couples need an average income of £18,000 a year to cover spending on essentials, such as groceries and bills. The figure rises to £28,000 when including more spending on leisure activities, and up to £45,000 a year after tax to incorporate long-haul holidays and a regular new car.
For people living alone, those figures are £12,000, £19,000 or £31,000.
- Find out more: six pension must-dos for 2023