Spring clean your business with finance
Spring is in the air. But put down that feather duster and pick up a pen. Here's how you can spring clean your business finances for the coming months.
Spring has truly sprung Down Under. While the dark days of winter are well behind us for another nine months, many businesses may still find their finances a little cold and similarly bleak. It needn't be that way, and the spring season can be a good time to get your financial affairs in order.
So, put down that feather duster and pick up a pen. Here's how you can, instead, spring clean your business with a smart integrated finance solution.1) Look at your physical assets
Now is good time to look at your current physical resources. Has that piece of machinery seen better days? Could it be hampering your productivity or even safety? The upcoming Christmas period can easily put a strain on your equipment, and the last thing you'd want is machinery breaking when clients are waiting for their orders.
Equipment finance is an ideal way to fund such capital expenditures, avoiding obsolescence and giving you more confidence that your physical assets will stand the pressure of the busy period ahead. Seeking pre-approval now is a smart move to plan for the near future and to keep cash flow steady in the face of growth.2) Chase your invoices
Clients don't always pay on time, creating cash flow blockages in your own finances. According to the Australian Securities and Investment Commission, inadequate cash flow or high cash usage was the No 1 reason for business failure last year. It was the reason why 43 per cent of companies went under, an increase of 2 percentage points on the previous year.
Consider finance and insurance solutions to effectively manage your cash flow and give you a peace of mind about problematic customers. Using a Debtor Finance facility, your outstanding invoices can be used to improve your situation today, not in three months' time. Importantly, combining Debtor Finance and Trade Credit Insurance frees up your cash flow so you have better security and financial foresight.3) Revisit your tax strategy
Few money-saving methods are more satisfying than making sure you are not paying more than you should in tax contributions. The right business finance solution can work nicely with your tax strategy to ensure you're paying your fair share without it restricting your ability to grow.
Many small businesses, for instance, can take advantage of the accelerated depreciation measures brought about by the most recent Federal Budget. Looking at the possibilities of acquiring new equipment through a Secured Loan Agreement would also enable you to own it outright, potentially putting you in line for immediate depreciation*. Meanwhile, if you're leasing equipment, your repayments may be entirely tax deductible*.4) Pay your tax debt
It’s all too easy to let your tax liabilities build up. With the ATO getting tougher with their collection methods, now is the time to consider finance options to raise needed capital to pay off any outstanding tax debt.5) Turn your expenses into investments
With electricity costs only going one way, consider investing in a solar system to generate your own electricity. Spreading the cost of the system over a term that suits your cash flow may be a viable way for you to benefit from lower electricity costs sooner. As there is a broad range of available systems on the market, ensure to do your own research into any system you do install. For example find out how long the company has been in business, what warranties they are offering, check whether their installers are accredited with the Clean Energy Council etc. The Classic Funding Group clean energy finance team specialises in structuring finance for solar pv, battery, efficient lighting, HVAC and other clean energy assets, and can put you in touch with their partner clean energy vendors.
Speak to your finance provider and accountant to put the best business solutions in place for your company this spring.
* Classic Funding Group do not provide financial advice. You should obtain your own own financial advice on the tax and accounting treatment of any finance solution you choose.