GSB employees walking through local YMCA

New Year Financial Health Checklist for Businesses

January 03, 2024

The beginning of a new year is an ideal opportunity to reassess and revitalize our banking strategies. Are you leveraging all the benefits your banking relationships have to offer? These 10 action items can serve as your checklist for improving operational efficiency, fortifying security, and seeking tailored business advice. Let’s dive in and set the stage for a prosperous year ahead.

  1. Evaluate Digital Banking Services
  2. Examine Financial Products and Services
  3. Explore Additional Services
  4. Build a Cash Reserve
  5. Monitor Cash Flow Regularly
  6. Manage Debt Wisely
  7. Negotiate with Suppliers and Customers
  8. Seek Professional Advice
  9. Stay Informed on Market Trends and Economic Conditions
  10. Invest in Growth and Development

Evaluate Digital Banking Services

Are you making the most of the digital tools available? Tools like mobile banking, online payment systems, and financial management software can greatly increase efficiency and ease of banking, including streamlining processes like invoicing, payroll, cash flow and expense tracking. Utilizing digital banking services can ultimately help you save time and reduce errors so make sure you’re using them effectively. Take a moment to check out the GSB E-Business Suite.

Examine Financial Products and Services

It’s also incredibly important to review the financial products and services you use to ensure they are still the best fit for your business needs. Identify areas where there are gaps and adjust for the upcoming year as you see fit. This includes assessing their cash management approach, the interest rates on business loans and credit cards, as well as the fees associated with various financial products. By understanding these offerings, businesses can make informed decisions that will benefit their bottom line.

Explore Additional Services

Banks often offer more than just checking and savings accounts. See if there are other services like merchant services, cash management/treasury management tools, credit facilities, insurance, or investment advice that could benefit your business. These additional offerings can help businesses optimize their financial processes and save time and resources, ultimately enhancing their overall financial stability.

Build a Cash Reserve

Building a cash reserve should be a top priority for businesses in the new year. Aim to set aside funds to cover unexpected expenses or shortfalls in cash flow. This can provide a buffer in tough times and reduce the need for emergency borrowing. You will be able to move through the year more confidently knowing that your business has some financial cushion.

Monitor Cash Flow Regularly

Keep a close eye on your cash flow, understanding when money comes in and goes out. This helps in anticipating shortfalls and surpluses, allowing for better planning. You should also develop cash flow forecasts for various periods (monthly, quarterly, annually). These forecasts should account for seasonal variations in business, expected growth, and potential market changes.

Manage Debt Wisely

Be cautious about taking on too much debt. While debt can be a useful tool when utilized properly, it can also hinder financial health if not handled correctly. Businesses should prioritize paying off high-interest debts and strategically manage their borrowing to ensure that any debt taken is for growth-oriented or essential expenditures and that the terms are favorable.

Negotiate with Suppliers and Customers

Work on terms with suppliers that might allow for longer payment periods. Conversely, encourage your customers to pay more promptly, offering incentives for early payments. By seeking favorable terms, businesses can reduce costs and improve their overall profitability. Additionally, open communication with suppliers and customers can lead to mutually beneficial relationships and increased loyalty.

Seek Professional Advice

Make time to consult with professionals, especially for complex financial decisions like employee benefits programs or tax planning. Seeking professional advice is crucial for businesses looking to navigate their finances successfully. Consulting with financial advisors or accountants can provide valuable insights and guidance, ensuring you make informed decisions for your business that align with your financial goals.

Stay Informed on Market Trends and Economic Conditions

Keep up with market trends and economic conditions that could impact your business. By keeping a pulse on the industry, businesses can proactively adapt to changes and identify new opportunities for growth. This will help you make ongoing proactive adjustments to your financial strategies.

Invest in Growth and Development

Lastly, investing in growth and development is a key strategy for businesses to make big strides in the new year. This can include expanding product offerings, exploring new markets, or investing in employee training and development. By focusing on growth, businesses can stay ahead of the competition and improve their financial performance in the long run.

By following these strategies for financial health, businesses can start the new year off strong and position themselves for long-term success.

Building a strong, long-term partnership with our clients is at the heart of what we do. Schedule a virtual meeting with a business banking expert to discuss your business needs and learn more about our comprehensive range of products and services designed to support you every step of the way.