Accounting Success for Small BusinessesMarch 07 2016, 1 Comment
It was recently reported that there were now 5.4 million small businesses in the UK and this is a figure that is continuing to rise. Since the recession, we have seen consistent year on year growth in the number of startups, with people more actively looking to invest in themselves to make the most of their careers and their lives.
As exciting as setting up a new business is, it is crucial that you get it right. Arguably, the most important factor for any business is its finances. If the numbers aren’t managed properly then your success will likely be short lived and that illustrious business you aspired to run, will be doomed to failure. Beginning with the right practices from the outset can get you off to the best possible start and it will set the tone for future success.
It is standard practice for businesses to use accountants to complete their books and submit things such as a self-assessment tax return to HMRC. The need for accounting services entirely depends on what stage the business is at, how much it is earning and what can realistically be afforded. Typically however, small business owners seek accountant’s assistance out of fear of not being financially savvy themselves and it is at this point that they begin to lose money that they don’t need to.
Whilst it can ease an owners burden, accountants are often a large expense for a small business and a common error that many make is that they employ an accountant before their income warrants actually needing one. It is hugely beneficial to any start up if they take the time to learn and manage their own accounts. It may seem time consuming and uninteresting but you don’t need to be a maths wiz to successfully run a small business. All you need is a basic understanding of accounting and bookkeeping and once you know the ins and outs, you will have a more in depth idea of your businesses financial health.
The best way to manage your books when starting out is by using small business accounting software. A worthwhile investment, accounting software is a good compromise between manually doing your own accounting through spreadsheets and hiring a professional to do all of the work. So what are the 5 main advantages?
Effectively managing your cash flow can help your business save money. Software that can effectively manage your bookkeeping makes it easy to determine incentives for employees and discounts for creditors or customers. In addition, you as the business owner can view profits and losses in a comprehensive way.
As mentioned above, accounting software is a huge cost cutter. For small businesses running on tight budgets, this is an alternative option that is very affordable and great value for money in the long run. Many accounting software providers also offer free trials for a limited period so that you don't have to pay unless you're satisfied with what the platform can offer.
Instead of all of the paperwork, accounting software streamlines the process and makes it easy to fill out employer forms, accurately and on time.
As it does so many of the necessary calculations for you, your financial data will have a higher level of accuracy than it would if you were keeping paper records, reducing the possibility of human errors, mistakes and file loses.
It is a simple way to efficiently manage your financial tasks in one place. A quicker process in terms of inputting the numbers, it allows all of your information to be stored in a secure and systematic place. Furthermore, it allows you to easily navigate through your accounts to quickly find the data you want like to see or check over.