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The Year Ahead: 7 Finance Best Practices for 2024 and Beyond

Wondering what finance best practices you should apply to achieve your business goals for the new year? We list them down here!

2023 is coming to an end, and we couldn’t be more grateful that many of us survived even the most stressful events in the world of finance. It wasn’t easy, but we made it!

Now it’s time to prepare for another year, and what better way to do that than to anticipate what's coming? Here are some forecasts for the year ahead and the finance best practices to face them.

2024 Financial Forecast: What Do We Expect in 2024?

Before you start asking yourself how to prepare for 2024, you must first read 2024 financial forecasts to learn what experts have observed from previous trends.

Livewire Markets, Australia’s number one source of investment ideas, shares some 2024 predictions that may just help you plan your business goals for the new year.

1. Australia enters the worst corporate default cycle

To be more specific: Australia enters the worst corporate default cycle since the GFC and the 1991 recession. According to Christopher Joye, portfolio manager & chief investment officer at Coolabah Capital, equity prices will go through downward pressure. This doesn’t end until “they offer returns that match what's available from relatively risk-free asset classes,” the Livewire article says.

The key drivers of the country’s inflation include elevated wage costs and positionally poor productivity.

2. On a per capita basis, superannuation will make Australia the wealthiest country in the world

In Australia, superannuation is the money your employer sets aside for your eventual retirement.

Andrew McKie, portfolio manager at Elston Asset Management, explains that Australia's wealth per capita will increase. There will be a favourable pot of superannuation funds for the years to come, and with today’s increasing life expectancies, those funds will definitely be useful.

3. “Sticky” inflation will collapse

Sticky inflation is defined as the continuous increase in wages and prices of certain consumer goods. It’s “sticky” because it doesn't change as often.

Marcus Burns, portfolio manager at Spheria Asset Management, argues that “inflation is not sticky. It’s temporary.” He adds that the productivity of AI and quantum computer revolutions may bring us back to low inflation.

Best Practices for Business for the Year Ahead

There’s nothing like planning for the new year. Check out these finance best practices that could help turn your business goals for the new year into a reality.

1. Simplify your processes

No one needs an overly complicated process. When you simplify your processes, you get to focus on creating value and improving work performance, therefore elevating the company’s overall work quality!

One example of a simplified process is automated three-way matching. Instead of manually collecting the purchase order, goods received note and invoice, and checking if they match, you can simply do this with automation!

2. Set smart limitations

Set smart limitations by limiting access and implementing controls within your accounts payable process. Separate duties and internal controls by granting only specific people access to the master file for vendors.

That way, there’s stricter control over whether or not a vendor is approved. This also makes it easier for you to have an aerial view of where vendor payments are going.

3. Match your invoices to avoid duplicate payments

Don’t make the mistake of paying invoices as soon as you receive them. Have a streamlined invoice process, which includes matching them and tracking whether they’ve already been paid. Always check for duplicates—for both invoices that come in and payments that go out—so you avoid making identical payments and risking your cash flow.

Don’t forget to take into account the payment due date as well to avoid any late payments.

4. Regularly audit and review your data

Regular audits and data reviews ensure visibility, especially on your bottom line. This will help you stay on top of things as you keep tabs on your cash flow.

The best thing about this is you get to immediately spot red flags, allowing you to prevent any issues or fraudulent activity before it happens.

5. Keep a record of disputes and resolutions

We recommend keeping a record of vendor-related disputes, as well as resolutions, to maintain vendor relationships.

For example, if you notice that a vendor overcharged you when you’ve already made the payment, there won't be a lot that your finance rep can do to get that money back. That’s why you must keep track of vendor disputes and resolutions and monitor your finances.

6. Make it a habit to reconcile accounts every day

Start including “reconcile accounts” to your daily to-do list so you’re sure that you’re closing the day without any issues. Let me paint you a picture: If you suddenly need to send payment to a vendor and you don’t add it to your records, your expenses and documents won’t match. End your day by comparing your records to ensure that the figures are in agreement.

7. Maximise technology

We live in a time when computers can do more than just compute. Make the most out of technology to speed up your processes—from automating your accounts payable to providing virtual cards to your employees, especially during business trips.

Technology platforms like automated expense management apps reduce human errors and simplify processes overall.

Despite the inevitable ups and downs, a new year is always a chance to start fresh and give your business the boost it needs to improve performance. With the 2024 financial forecast and these best practices for business, you get a head start in planning the coming year.

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