Knowing your financial status in real-time will mean that you can make important business decisions, not only quickly but sensibly too. If you are finding that you can’t keep a track of your finances alone, then it’s best to outsource your bookkeeping to a professional. Not only will they manage your transactions but they can produce insightful reports to enable you to set budgets and goals for your business.
Educate yourself
If you're new in business and you’re not sure where to start then make sure you get the help you need from the outset. Seek advice from an accountant or a bookkeeper who can point you in the right direction. The earlier you get in control of your finances the easier it will be to maintain them. It’s easy for small problems to spiral out of control and once this happens you’re heading for failure.
Take a salary
Decide on how much money you require to live off each month. Pay yourself this amount on the same day each month, just like you would if you were employed. This will help you to budget from month to month. Be realistic with the amount you pay yourself, you need contingencies in case things go wrong and also money to invest in new opportunities or software which will support your business.
Save for tax
Make sure you set money aside each month for your tax bill. If you file your Self-Assessment tax return as soon as you can, this will mean you can plan ahead and there will be no hidden surprises.
Invoice consistently
This may seem obvious but make sure you send out your invoices as soon as possible. The quicker you send your invoices out, the sooner you will receive payment and this will help to maintain a healthy cash flow in your business. Chase any outstanding invoices and have a process to follow. Don’t be afraid to chase people for payment.
Payment terms
Make the most of the payment terms you agree with suppliers. If they are giving you 30 days to pay then make sure you pay on time but not too early. The longer the cash stays in your bank account the better it is for your cash flow.
Employ an accountant
Investing in someone to do your bookkeeping and submit your tax return will save you a lot of time each month. Having an accountant to look after your bookkeeping frees up time for you to concentrate on bringing in sales and growing your business. An accountant will have time to keep track of your transactions on a more regular basis than you would. Using the latest software such as Xero can ensure that you have access to your accounts in real-time 24/7. No more waiting around to make those important business decisions. With cloud accounting, you can get access to your financial position from anywhere you have an internet connection.
A good accountant will also help you to save money. They will audit your transactions to see if all your outgoings are essential or if there are other ways to help you save money on your subscriptions.
Accountants can produce insightful management accounting reports and discuss these with you during your monthly meetings so that you’re always in the loop and can plan ahead to meet your business goals.
If you need help with your bookkeeping, then please get in touch to discuss your requirements and we can guide you on how to run a successful business.