Considerations at the Start of the New Financial Year
23 May 2023
It is the start of the financial year so what should transport operators be thinking about when it comes to finance? According to Morgan Strong, General Manager – Commercial for UDC Finance, there are certain conversations you can be having with your financial advisors at this time of year.
“It’s a good time to identify some key ratios you can use to set yourself up well for the year ahead,” Morgan states. “By understanding your numbers and being able to communicate your story better, this enables any funder like UDC to be able to better assist you and your business.”
So, what sort of questions should you be asking yourself and your financial advisor at this time? Here are five key considerations:
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Was your turnover last year the same, better or worse than previous years, and why was that?
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What did that mean for your gross profit? Sometimes you need to ask yourself honestly, are you busy just for the sake of being busy?
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What did your fuel costs look like versus previous years? What will the impact be of the tax relief coming off this year?
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Are your repairs and maintenance costs up, and is this a sign that you need to be putting money aside for a new vehicle or equipment?
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Have you considered adding an FAF (fuel adjustment factor) to your freight rates, or have you perhaps investigated a renegotiation of rates?
“Once you’ve got a good grasp of your current financial situation, and you’ve spoken with your financial advisors, UDC is more than happy to meet with you to see what finance packages we can put together to suit your business needs,” says Morgan.
“What UDC can also do, which other funders may not be able to, is provide you with insights into where your operation fits in the industry. We’ve been around for over 85 years now so we do have extensive experience in and knowledge of the road transport, agriculture, forestry, and civil construction industries, which can be very helpful.”
Contact details for all UDC Commercial Managers can be found at udc.co.nz. UDC representatives are located up and down the country, so you can in touch with your local rep, who understands your region, to have a chat and take it from there.
This article is a general market commentary and does not constitute financial advice.