When you’re running a small business, it can be a struggle to devote all the time and resources you need to manage your accounts effectively, but it’s vital that you do. After all, accounts and cashflow form the foundation stones of a successful business.
Here are five strategies you can implement to make managing your accounts easier.
Get the right accounting software
There is a huge range of accounting software packages out there for businesses and they’re easier to use than ever. What’s more, many come with additional features that can be really useful for your business. The key here is to find software that meets the needs of your business and can offer the best value for your investment.
While you’re at it, research apps that can help you be more organised and keep track of your incomings and outgoings when it comes to both personal and business finances.
Don’t leave accounts to year end
Make sure you don’t leave it all until year end. Keep your accounts up to date as you go along, even if you have to hire someone to do it for you. There’s nothing more certain of disaster than leaving all of your accounts to year end and going to an accountant with a box of receipts and invoices. Again, there are platforms out there to help with this. All you need to do is devote a little time every day or an hour at the end of the week to input the relevant details. The technology should do the rest.
It’s vital to comply with tax legislation and all the deadlines that come with it. Keep all your receipts in an orderly fashion and include all those important dates in your business diary/calendar. While taxes can be daunting, a visit from a tax inspector or an audit can be a real strain on a small business with limited resources.
Likewise, make an estimate of your tax liabilities for the year ahead and ensure that you set aside a reasonable amount each month to make sure you’re covered when making your annual tax return.
Keep personal and business accounts separate
If you’re just starting out, or are a sole trader, it can be tempting to mix your personal accounts with your business accounts, but this can be a big mistake. Open a dedicated business account. That way your personal finances stay personal and your business accounts are much easier for you or your bookkeeper to manage. Above all, resist the temptation to secure your business finances with personal funds as it will create an accounting mess which you may need professional help with later on.
Look after credit control
While it’s important to pay your bills on time, it’s just as important to stay on top of credit control. After all, this is what keeps cash flowing through your business, so you can pay those aforementioned bills, as well as yourself (and, of course, any other staff you have working for you), while continuing to invest in the success of your business.
Make sure you have a great credit control strategy in place and follow up on invoices as soon as they become overdue. Run credit checks on businesses before offering credit terms and be clear upfront that your terms of payment must be met. If necessary, charge interest for late payment.
The best way to get to grips with accounts is to educate yourself. When you’re running a business, accounting and taxes are a vital part of the puzzle. Fortunately, there are plenty of courses out there that can help you get acquainted with the basics, covering topics such as VAT or online filing. The more you understand business finance, the better you will be able to make money management decisions that influence the success of your business.
Accounting for a small business may be daunting at first, but with the right technology, knowledge and a little help, you can put in place the systems that work best for your business. It’s vitally important that you invest the time and effort to get it right. Financial mismanagement is one of the leading causes of failure in small businesses.
Which is why, here at KoalaPays, we provide tailored solutions to make business finance management a breeze. With us, your business will get its own dedicated Account Manager to provide you with a first-hand advice and help you look after your financial affairs.