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New Year Resolution: spring clean your finances

on Wednesday, 15 December 2021. Posted in Finance

Many businesses would run more smoothly and efficiently by developing good habits around money. Let 2022 be the year you spring clean - every quarter

New Year Resolution: spring clean your finances

Many businesses would run more smoothly and efficiently by developing good habits around money. Let 2022 be the year you spring clean - every quarter

As a business owner, I know that if I wanted to, I could put in a lot of hard work running operations and not once look at the financials. Fortunately, I trained as an accountant, so I have an advantage when it comes to the money side of the business, but I am well aware that it is only one skill among many that you need when you run your own business. 

I’d go further and say that my ability with numbers wouldn’t even be the most important day-to-day skill in many other businesses, especially those which require expertise in engineering, hospitality or agriculture. What I do know is that any business which neglects the financial side will not stay in business long. 

Many of the most successful companies I’ve worked with at Swoop, which specialises in giving SMEs access to funding across grants, finance and equity, have been partnerships: the one who can do the core part of the business and the one who looks after the finances. One person to build the widget and another to make sure that bills get paid on time. 

As we go into 2022, the pressures under which businesses operate are only going to get tougher. The last two years have been a test of survival for many of our customers. The government gave generous terms to encourage lenders to lend. Businesses did what they had to do to stay above water. Now the immediate danger is past, it’s time to start paying back the pans taken out at the height of the crisis.  

Unsurprisingly, Swoop’s customers have pointed us in the direction of most need: we have found huge interest in products such as VAT loans (which spread repayments through the quarter so that you don’t have to pay one huge bill every three months) and products offered under the Recovery Loan Scheme which has been particularly popular as a refinance tool for businesses which took out a loan under CBILS and no find the repayments kicking in. 

Perhaps the most surprising finding of our customer survey, however, was around a lack of engagement when it came to credit scores. Just 10 percent said that they knew it, which made my inner accountant sit up: your credit score is how other companies see your business. If you want to borrow money, your credit score makes a huge difference to whether you’ll be allowed to borrow and how good the deal might be. 

In 2022, businesses should strive to keep good habits around their finances: paying bills on time, making sure accounts are filed and Companies House is kept up to date with changes. One of the surest ways to check you are on track is by monitoring your credit score which acts as a snapshot on the health of your business. 

At Swoop we developed a free credit report that tells you how the financial system views you. It’s quick, costs nothing and puts power into your hands. If you have a reputation problem, you’ll know fast and will be given tips on how to fix it. 

Overwhelmingly, the way to a better score is simply through good financial hygiene and you will be able to track your improvement. Instilling good habits around money should be your goal for 2022 because with good habits in place, everything else becomes a lot easier.

This article comes courtesy of Swoop who help thousands of businesses across the globe look after their financial wellbeing. Swoop's clever technology seeks out the best deals on the finance products your specific business needs across the entire market, saving you thousands of pounds and hours of your precious time. To check your score click here for free:    

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