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Month End Procedures

I know, it's not thrilling is it?

The thought of doing 'month end' sounds so onerous, and well, dull. (shudders).

But hear me out.

The month end function serves a purpose, but even the name smacks of grey suit. And we're not that, are we?

So let's reframe it to something a little sexier. How about Financial Reset instead?

What exactly is a Financial Reset?

Well, put simply, it's a quick look at your finances at the end of the month, to see how you're getting on, and I reckon that there are 6 key areas that you need to look at.

Let's take a quick look at them.

1. Reconcile your bank account

Reconciling your bank account is just about the most important thing that you can do as a business owner, and it's fairly simple to do.

You're basically comparing the transactions in your bank account to your cash book/accounting software. If you don't have either of those (and I'm not judging here), then take a good look at your bank account each month, and ensure that there are no nasty surprises.

2. Be paid for what you've done.

Ensure that you've raised invoices for each and every piece of work that you've done, every product that you've sold, every single solitary item.

If you find it hard to keep track of your projects, use a diary, notebook or some software.

Once you've done this, then turn your attention to your debtors. Who owes you money, and most importantly, send them a statement. Once you've sent them the statement, make sure that you keep chasing. Go get your money.

3. Check your receipts and invoices

Ensure that all your receipts are stored safely away, there are great options out there for you, such as Dext, Hubdoc, Auto Entry. in this age of tech stacks aplenty, there really is no excuse.

Once you've tamed your receipts, ensure that you know who you need to pay, be it suppliers, HMRC.

And when.

4. Check your budget

This is a big one. In an ideal world, you'll have a budget.

A budget is an income and spending plan based on what you're planning to do.

It doesn't have to be terribly complicated, but even the simplest of budgets will ensure that you stay on the straight and narrow, and don't spend what you don't have. Start with your break even point, and add in some savings pots for VAT and taxation, and you'll be well on your way to being totally in control.

5. Check your projected cashflow

Cashflow is different from budget.

A cashflow forecast predicts when income and expenditure will arrive in and leave the bank account.

You'll need a separate set of figures for this, and they'll include the starting point of your bank account at the beginning of the month and all your projected income and expenditure, and leave you with a figure that will hopefully be somewhere close to where you need to be at the end of the month.

6. Pay yourself

We're all in business to make money, so ensure that you pay yourself. You'll hopefully have a figure already in mind from your budget, so this won't be an issue.

We all know that you make your money doing what you do. What you're good at.

Your money is made at the coalface, and the last thing that you want to do is to sit down and look at numbers. But if you don't have any understanding of where you are financially, then you'll never thrive, take on that new team member, or finance that new vehicle.

Will you?


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