7 strategies to manage business costs in 2023
Get expert business advice in challenging economic conditions.
Balancing business budgets in the 2020s
There's no getting around it; rising costs have left many SMEs feeling the pinch. Over half of Australian businesses experienced increased business costs in early 2022.
Business has pushed through a global pandemic, natural disasters, supply chain issues, staff shortages, and now? Record levels of inflation. The economic challenges of 2023 mean it’s a good idea for every business to consider costs: here’s 7 strategies to discuss with your accountant.
1. Forecast for informed decisions
Forecasting your revenue and costs is a good place to start. In uncertain economic times, regular forecasts inform better financial decisions.
Your accountant can help you gather the correct information – like your P&L, cashflow statement, and balance sheet – to create a realistic forecast aligned with your business goals that prepares for the highs and the lows.
2. Checking recurring costs
Recurring costs for app subscriptions can add up. Make a date in the March quarter to review your subscriptions. For each app, ask if it:
- Connects to a clear ROI
- Saves time and/or money
- Can be replaced with existing functionality
2023 is a good time to simplify your processes and streamline recurring costs.
3. Review payment terms
The gap between delivery and payment can be a cashflow squeeze for some businesses. Reviewing your average times to receive or make invoice payments can help inform decisions on your AP and AR payment terms. This can require negotiation with both customers and suppliers to ensure partnerships are not impacted negatively.
4. Start tax planning early
Starting early on tax planning allows your accountant to review your income and expenses before the end of the financial year - leaving room for some strategic decisions in the final quarter.
Your accountant may recommend tax planning as part of a broader tax minimisation strategy.
Multiple sources of debt can be stressful for business owners and leaders. Debt consolidation or refinancing rolls all debts into a single consolidated loan which can help improve cashflow and save on interest payments.
Your accountant can support the debt consolidation process, create a strategy, and provide key information to lenders.
6. Plan for your future
Knowing your current position helps inform financial planning decisions for longer-term benefits. Your accountant and financial planner can work together to align your strategies with business objectives.
7. Don't disregard growth
Not all businesses and industries slow down in tough economic conditions. If you're ready for growth in 2023, keep an eye on costs and get expert support to forecast and plan your finances.
Support to optimise your spend
Like regular health checkups, every business owner should plan for ongoing cost reviews.
Get the right advice. Contact Scotts Chartered Accountants for a confidential discussion on your business costs in 2023.
The information is general in nature and is not personal advice. It does not take into account your needs, objectives or financial situation. You should seek independent advice suitable to your circumstances.