Growing a business can be difficult at times, but having a proactive approach to your accounting can make a huge difference.
Solid financial management is one of the keys to building a thriving business and ensuring its long-term success.
Are you on top of your accounts?
As a business owner, staying on top of your finances is crucial.
When we start working with new clients, we often find that their previous accountants were reactive. They usually focused on the compliance side of accounting – submitting returns to HMRC, for example.
Having a more proactive approach to your accounting and finances can really help you grow your business. Below we have outlined six tips that can help you start putting a more proactive strategy in place.
1. Have a clear understanding of your financial situation:
Let’s start with the basics: accurate record-keeping is essential for all businesses. A proactive accounting process will monitor your income and expenses. You should always have a clear picture of your financial situation.
This helps you to make decisions about how to use the resources you have. This can include money, time and your team to support your business growth strategy.
2. Have, and stick to, a budget
A budget is a critical tool for any business because it helps you keep track of your income and expenses.
When you proactively follow a budget, it can prevent you from overspending and ensure you use your resources efficiently.
3. Use accounting software
Accounting software can automate a number of different parts of your accounting and bookkeeping process. This means you can focus your time on doing what you do best and growing your business.
Additionally, using accounting software helps you get more from your relationship with your accountant.
They can access your financial information more easily, which then allows more time for proactive analysis and advice, which is where the real value of an accountant comes from.
There is a lot of accounting software on the market though, so you need to avoid getting overwhelmed.
The best way to do that is to work with a proactive accountant, and then to ask them which software would best support your process.
Are you looking to become more proactive with your accounting and finance? To receive more of our tips for implementing a proactive accounting approach, so that you are more likely to achieve your goals, enter your details at https://bit.ly/proactiveaccountingtips.
4. Stay on top of invoicing
Getting paid late is often a problem for creatives, trades and construction businesses.
Staying on top of your invoicing is essential to maintain a healthy cashflow.
One way to manage invoicing effectively is to use invoicing software. These fantastic online tools can automate many tasks, making it easier to stay organised.
The less money you have owed to you, the healthier your cashflow will be.
5. Set clear financial goals
Having specific financial goals means you have targets to work towards, which will help keep you focused and motivated.
Some financial goals for your small business might include:
· Increasing sales by a certain percentage
· Reducing expenses by a specific amount
· Achieving a positive cashflow
· Growing your business to a certain size
6. Understand your tax liability as early as possible
Taxes can be complicated, but with a proactive approach to your accounting and finance you are less likely to be caught out with an unexpected tax bill.
Also, when you know which taxes you are likely to be liable for, you can work with your accountant to identify any incentives or other opportunities that are available to you.
Too many business owners end up filing their HMRC returns at the last minute, so don’t have the time to look into any potential savings or efficiencies that could be made, or ways that their business could grow.
How proactive is your accountant?
A proactive accountant will not only help you with your past and present numbers, but will also help you to utilise them so you can improve your future numbers.
On a scale of 1-10 (1 being ‘not at all’ and 10 being ‘very’) how proactive is your existing accounting and finance process?
And which of the above 6 tips do you need to implement into your accounting and finance process?
Access more proactive accounting tips for free:
This article was written by the team at Argus Accounting.
Argus was founded by Sharon Hirsch in 2020, and our team of 5 has more than 20 years of experience in the accounting and bookkeeping sector.
Based on Sharon’s experiences growing up, and the conversations we have with so many business owners, it’s our mission to ensure you can run your business in a way that works for you and your family.
We typically work with owners of creative, trade or construction businesses, who have been trading for at least 2 years, and have an annual turnover of around £500,000.
To receive more of our tips for implementing a proactive accounting approach, enter your details at https://bit.ly/proactiveaccountingtips.
