One of the major reasons early stage businesses fail is because of their inability to maintain effective cash flow. While most entrepreneurs will be focused on their core service offerings, many undervalue the importance of accountancy and how it sits at the heart of every business. Sound accountancy advice for small business owners is imperative.
A few major reasons accountancy should be treated very seriously as soon as you start your business include:
- Manage your reputation with clients, suppliers, and customers (avoid missed payment, late invoicing and calculation errors)
- Make sure you always have enough money to pay your staff and retain productivity and motivation
- Take on less debt and therefore increase your ability to generate greater profits in the long-run
- Do more with what you have and free up cash to invest back into your business, helping you to scale much faster
Dangers of Poor Early Stage Accountancy
It’s easy to shy away from accountancy, but those that do this will soon face trouble in some shape or form, whether that’s future complications for yourself or serious errors that will affect your ability to operate.
Remember that the financial management of your business affects everyone from your suppliers through to your customers, investors, and employees.
In poor economic climates, it is especially important to secure the basic fundamentals of accountancy and bookkeeping so that you avoid failure.
Strategies for Handling Your Start-up’s Accounting
Every business, regardless of size and turnover, could benefit from professional advice, expertise and the support of a professional accountant. You might not want to pay for someone to come in house to do your books, but you don’t necessarily need to.
Often, simply consulting with a professional accountant can help understand what’s at stake and how you can build a strategy for accounting that works for you and your team.
Alternatively, you can also build up your own skills in this department or leverage some very useful tools and software like Sage or Xero to take most of the hard work away.
Hiring an Accountant
Some of the benefits of working with an accounts are obvious, but here are a few reminders:
- An accountant can spot problems that untrained or inexperienced staff might not be able to
- An accountant makes an all-round a solid advisor for all things financial during your business growth journey
- An accountant will help you comply with tax legislation, PAYE, and NI benefits, with minimal stress
- An accountant will keep you updated on the latest government legislation
- An accountant can find ways to maximise the potential of your business, reduce costs and generally become more streamlined and profitable
Growing Your Accountancy Skills
It is undoubtedly important for entrepreneurs and company leaders to have a good grasp of financial management and the basic accounting. And if you’re already pretty good at something, why not handle it yourself?
The benefit of this is that you’ll be saving on the costs of hiring an accounting employee or outsourcing it to someone else. However, the huge downside is it is an incredibly time-consuming process for someone who needs to handle several other high-level tasks.
As many owners and managers will be more invested in other growth aspects of business, an added accountancy burden can take a toll.
Work with a Good Accounting System
Cloud computing has opened a gateway of possibilities for business of all sizes. With software like Sage or Xero, you can easily work directly inside the system and let it handle all of the complicated or tedious tasks for you.
Having said this, you or your staff will probably need some level of training before you can fully wield the power of accounting software. Some accountants train for years to be able to effectively manage enterprise-level accounts, even with the help of intuitive tools available today.
Need Accounting Training?
If you’re looking to enroll you or your staff on a Xero or Sage course in Leeds or other parts of the UK, Total Training Solutions operate and collaborate with several accounting courses designed to get individuals up and running with a sound working knowledge of digital accounting features and processes.
Remember, the consequences of bad bookkeeping and financial management are huge and can often make or break the success of a business. So, if you’re investing in this area of your business, don’t forget to make sure you or your team are fully trained. Good accountancy advice for small business owners is crucial to your future success.