THE REAL TIME FOR NEW YEAR’S
resolutions
BY DAVID HENDERSON,
CEO OF GLOBAL ACCOUNTANCY FIRM ROCG AND THE FOUNDER OF CASHMAXFORECASTER.COM
T
he start of a new financial year is the best time of year to come up with resolutions, especially for the hotel and accommodation industry. “Way too many operators are in set and forget mode when it comes to cash flow management,” says David Henderson chief executive of accountancy group ROCG Asia Pacific and founder of CashMaxforecaster.com. “It’s never too early to start planning for the end of the financial year. In fact preparing for the June 30 is a yearround job,” he said. Whilst a large emphasis is placed on 30 June for financials once that is behind you it is time to think about the broader picture as everything we do will ultimately have an impact upon the financials of the business. The new financial year is the ideal time to consider items you may have under contract terms and renegotiate and
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review agreements that you continue from year to year.
impact but also think about your wider cashflow implications.
Are there items that are influenced by the Australian dollar? Should you consider buying those items in bigger quantities at certain times and holding higher stock levels if the Australian dollar presents a buying opportunity or should you be looking at hedging or moving funds around if the opportunity presents.
Henderson said the special needs of the June 30 often catch businesses by surprise, even though the same things must be done on an annual basis.
Consider a review of your major suppliers. But when doing so consider not only the financial implications, also ensure you consider the quality and service that you receive. There is no point in having the lowest price if you are left without supplies at some stage or the supplier is less than reliable.
“There can be a down-time in trade for stocktake, slashing of profits margins due to seasonal offers, the settling of debts, chasing of creditors, and a binge of last minute budget-balancing spending.
Are there items that are consistently hired or rented that may be worth purchasing and if so, what are the options to finance and will this provide a more effective cashflow? Don’t limit yourself by just thinking about the tax
“Cash flow can become one of the biggest problems for the hospitality industry at the end of each financial year,” he said.
“Without planning, tax time obligations can deplete current cash flow reserves and this can have a negative impact on the following year’s operations,” he said. Most hotel and accommodation industries have the advantage over big corporates in that they can