When running a small or medium-sized business, you need to have the ability to confidently manage its finances and have effective accounting and bookkeeping processes in place.
Having this means you can successfully begin to really build your business because the financial foundations are in place to support your plans and fulfil your legal responsibilities.
The first step is to ensure your personal finances are separate from your business because you want to keep them completely separate.
This makes accounting and finance reporting easier and helps you analyse the overall financial position of your business and this can be achieved by creating a separate business account.
From this, you can access clear financial reports, budget effectively and prepare your taxes much more efficiently.
Budget planning is essential if you are to run your company how you want to, your budget needs to be robust and offer realistic forecasts.
This allows you to factor future expenses, mitigate any challenges your cash flow presents and set achievable financial targets.
In addition to this, you need to be consistently reviewing both your budget and forecasts to reflect your company’s actual performance.
From this, you can make effective changes to meet those numbers and allow you to remain on track to achieve your company’s overall goals and targets.
Another important thing you can do is implement credit control processes to manage challenges such as cash flow issues.
Having this in place means you can set clear payment terms with your clients and put measures within your processes to speak with them if payments are late and overdue.
This should also accommodate for when you take new clients on board and it’s essential you conduct thorough credit checks to clarify they have the resources to work with you and pay you back.
Another important aspect of business which can filter into your processes is efficiency and this is where digital accounting software can support.
Digital accounting software gives you the ability to collate all your company’s finances into one place, organise it and ensure the data is accurate when you need to submit it.
As you have obligations to HM Revenue and Customs (HMRC) to fulfil, you need to have a tax management strategy that meets this, but also allows you to save extra funds that can be put back into your business.
A tax strategy can be cost-effective and utilise the various tax reliefs that are available to SMEs, but you should check your eligibility first before submitting any claims and this is where the experience of an accountant can help.
Your accounting and bookkeeping procedures need to be effective and run in a way that suits your needs and if you want advice and support, our team can help.
We’ve supported businesses from a variety of different sectors, offering comprehensive advice to help them look at their current procedures, organise their finances and offer recommendations to help implement new measures to ensure their company is running at its very best.
Get in touch to see how our team can help with all accounting matters.
