This article will be continuing on from the last article on the facts of your business that should be reviewed and considered when approaching the end of financial year. Working your way through this checklist will assist you in improving your business efficiency, business profitability and set a strong foundation for the year ahead.
Create or Update Policy Manual
Creating or updating your company’s policy manual during your end of year routine will help make your business more self-sufficient and less dependent upon you in your absence. An out of date policy manual is a wasted opportunity to boost staff performance and business sustainability. The manual also acts as a means for staff processes to be documented. Getting staff to document their important processes and routines in the manual means that key staff ‘should’ be able to be replaced by anyone who has access to the manual. Having an up to date manual is vital for streamlining your business processes and for developing an informed and efficient staff cohort. Just some areas in particular that can be examined during a policy manual review may be:
- Staff authority to access money (petty cash, purchasing orders etc)
- Routine processes (Time sheets, communication plans, daily routines)
- Task and role allocations
- Sustainability practices
Review IT Systems
Modern business IT systems are at times quite extensive so there are many different areas that should come under review during this period of the financial year, some of these include:
- Conducting a cost/benefit analysis on your software licenses and agreements: Implicit in this is looking at other options that have entered the market or freeware that could potentially save your company money. The number of licenses and how vital that piece of software is to your company should be reviewed annually to prevent excessive licensing costs. Two means of effectively managing this element of your business is by either hiring an IT specialist or outsourcing your needs to an IT support company. However depending on the level of your needs and the amount of software support you require it may be recommend instead to assign a ‘Software Specialist’ from your in-house staff. The in-house specialist may simply be someone that has a great understanding of a particular piece of software that is vital to your business. These specialists can be used to answer questions from other staff and offer introductory training on the software to their colleagues. Having multiple specialists for each major piece of software will rapidly increase the spread of knowledge in your organisation and will more efficiently spread training workload between managers and senior staff. This option also reduces any key man risk scenarios as you then have multiple staff members who undertake this role for your company.
- Review backup and data retention processes: This would involve looking at how effectively your staff and company are backing up and retrieving your data whether it is stored locally or in a cloud based system. This is an important consideration in the event of a system corruption or loss of data. Having an effective backup and restore system in place means that businesses can continue as normal in the event of these situations.
- Directly linked to the previous point is the undertaking of a Disaster Recovery Plan (DRP) for your IT systems: This should consider how your company is operated in the event of the loss of supply from electricity, gas, water or internet services due to such things as fires, blackouts and floods etc. A consideration that most larger companies make when developing DRPs is the geographic location of their backup facilities. A facility that is located geographically near the local data source could very well be impacted by the same disaster, thus companies often locate their backup outside their immediate area or if possible have a double backup system with one based outside the area completely. These backup systems may simply be two separate cloud based storage providers located in different areas or a local backup at another store.
- Review that your staff details are up to date in your internal system
- Conduct an Innovation Report on emerging technologies or software that could be potentially implemented in the future.
Review your insurance policies
Some questions to consider when annually reviewing your insurance policies are:
- What types of policies does your business require? Does your company require asset, business interruption, loss of attraction, life or income replacement insurance? If so is your current policy the most cost efficient one available?
- Do your insurance policies match your needs?
- How much coverage does your business require?
By asking yourself these questions during your review process you can hopefully prevent under or over insuring your business for the coming year and as a direct result save yourself money that can then be reinvested back into the business or directly into your pocket.
Review Resource Use
Reviewing your company’s resource use is a very broad objective however a specific area where easy gains can usually be made is in reviewing your expenditure on electricity, gas, water and waste disposal. In order to better prepare your business for a strong first quarter look to minimise resource costs by doing some research through industry groups, associations, specialised industry consultants or publically available information. Look for alternative suppliers with cheaper costs for your current resource needs; at times a beneficial agreement can be negotiated just by discussing the potential of switching providers. Don’t just look for large national providers but also look for any local providers that may be able to compete with current providers or better fit your resource needs. A vital component to this step is also examining wasteful or unproductive processes that waste resources.
Research Grant Opportunities
It is important to always keep your eye out for possible means of increasing your capital that can be reinvested to grow your business. There are many different grant opportunities available to companies for those that know where to look. Start by doing your own research and if needed contact any industry associations or consultancy groups you are already working with.
If you begin your End of Financial Year review considering most of these strategic concerns covered in this two part series you will be setting yourself a firm foundation to move into the next business year.