Maintaining the health, growth and success of any retail or hospitality business means ensuring regular financial administration and management tasks are scheduled in your monthly calendar and actioned. All businesses need effective control and financial management in order to succeed in the modern competitive environment, and this means planning, controlling and organising all resources on a continual basis.
Tips on monthly jobs to schedule in to your planner
Some monthly tasks essential for continued profitability within the retail and hospitality sectors include:
1. Review of business plan and objectives
Take a look at your business plan on a monthly basis, in order to tweak any forecasts for the coming months and ensure your business is on target to meet all objectives. Your business plan (or annual budget) is a valuable tool which helps you maintain a clear view of exactly where your business is at this moment in time, and where it’s heading over the coming months and years. Your business plan should provide details of the way in which the business will be funded over this period, any additional finance required and the sources for this finance.
2. Monitoring of current financial status
Regular monthly monitoring of the current financial health of the business is also essential for continued growth and profitability. Reviewing your current status against business plan targets is an important job which will flag any shortfalls or potential problems that could arise over future months. In particular you will need to focus on key ratios such as Food and Drink Gross Profit % and Staff Labour % of Sales. Ideally, you also need to know how much cash is in the bank, details of sales and levels of available stock on a daily basis.
3. Review credit facilities
Problems with cash flow can cause a major headache to any business. Of course, in retail and hospitality environments where cash or card sales are the norm, this is unlikely to cause too many problems. Difficulty could arise if you have a number of corporate clients paying on account, though. Monthly reviews of outstanding debtors can help cut instances of late- or non-payment of invoices, and it’s important to make all customers aware of your business credit terms and conditions at the very outset. Keeping a check on the timing of business-issued invoices can also help ensure your business creates invoices at the earliest possible point in the cycle. Any reputable invoicing software will also send out automated reminders to customers for overdue debts.
4. Understanding daily costs
Keep a watchful eye on the day-to-day costs of the business on a monthly basis at the very least. Cash flow problems can affect a business at any time, so you need to be aware of your minimum daily operational requirements in order to factor in dates when property rental, business rates or employee salaries are due to be paid.
5. Monitor accounts records
Keeping up-to-date accounts records helps ensure your business is not losing money by way of late payments or missing out on discounted supplier bills. Take the time to monitor accounts on a monthly basis, so any requirement for additional funding can be in place when required and all business expenses are within normal ranges (and that your suppliers’ prices haven’t crept up!).
6. Review essential tax deadlines
Your business accrues penalty charges and fines if tax deadlines are not met. VAT returns, employee payroll RTI submissions/PAYE payments and corporation tax returns need to be scheduled for completion by due dates. Carrying out a monthly review helps ensure these essential business returns are not missed and all regulatory requirements are met in full.
7. Review overheads and put cost efficiencies in place
Most businesses can make cost efficiencies on overhead charges, like utility bills, when employee behavioural changes are in place. Simple tasks, such as switching off lights and power to equipment when not in use, can help cut power bills for your business. Carrying out a regular review of utility costs on a monthly basis and communicating effectively with employees regarding behaviour change in the business environment can help your business reduce overheads significantly.
8. Review and control stock levels
Ensuring efficient stock control in your business and putting tracking systems in place can cut the levels of inventory you need to keep. Once you have adequate stock control systems in place, it’s likely you will see significant cash flow advantages.
9. Finance and funding
Monitor available business funding on a monthly basis and check around providers to ensure your company is benefiting from the best deals. Business overdrafts and loan funding from your bank may not be the most effective means of funding your business over the longer term.
10. Don’t neglect seeking professional advice, if required
Problems in business can arise at any time. If your monthly checks reveal your business is moving towards financial crisis, call in professional help straight away.
Virgate Accounts offers outsourced financial assistance to businesses in the hospitality and retail sectors. Get in touch for more information.