244 week ago — 4 min read
Background: As the new fiscal year approaches, financial advisor Anirudh Gupta shares tips to kick-start the financial year confidently.
Those of us running a business often find our nemesis in maintaining finances well. There are certain ideas that have helped many of our clients and associates to run their business efficiently.
1. Zero-base on key result areas
Zero- based budgeting is a method to justify all new expenses of a business for each new period. It is important to sit with the team and other stakeholders to do a zero-budgeting to identify pain points as well as opportunities. This strategy can in fact be applied to all important tasks.
One of our associates used to take calls in the mornings on non-business issues. A lot of his time would get wasted this way. Now he takes those calls only in the afternoons. It helps him prioritise tasks better.
2. Make a file for passwords
Most of us, barring a few exceptions, don’t possess a great memory. It is important to create a file for key passwords. This is useful both at the company level as well as personally.
3. Do your tax planning early
If you are a professional and have liquidity, it is better to go for the elss calculator or payout for insurance premiums early on, to avoid a last minute rush. This also helps in better structuring of finances at a personal level.
4. Discuss your key financial problems with advisors
Many people when they get into a spot, tend to retreat into a shell. It doesn’t help them as they don’t seek out a different perspective on the problems they are facing. Seeking professional financial advice brings about understanding of real alternatives which help to bridge the gap between results and reality.
Many people don’t organise a meeting between all their advisors fearing that their entire information will become known to all. As per my experience, a group perspective matters in overcoming difficult situations.
5. Plan your debt retirement
This is the time of the year when people running their businesses take some money out of the business or professionals get their bonus. One can look at retiring debt early and preparing a strong emergency corpus for tough times.
At an entity level if debt is less, the company is able to withstand a situation which is potentially stormy in nature. A year’s fixed expenses need to be there before revenue kicks in, in today’s volatile times. Even established businesses can lose momentum if they do not have adequate capital.
6. Work on a profits-first approach
Profit-first is an integrated approach to cash flow and profitability management. It helps to identify the 20% activities which contribute to your profits. It is about aligning the product-market fit with a client-centric solution which helps achieve this end.
7. Pay your taxes timely
All relevant taxes need to be paid on time to avoid penalties and unnecessary headache. Liquidity is a critical issue, however can be planned from a short-term and long-term view.
Plan well, be at peace.
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Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views, official policy or position of GlobalLinker.
Posted byAnirudh Anand Gupta
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