An essential element of running a small or medium-sized business is being able to confidently manage its finances by having effective accounting and bookkeeping processes in place.
Your business needs effective, clear financial management procedures in place because they allow you to lay the foundations to start building a successful company.
What can I do to ensure my accounting and bookkeeping are effective?
One of the first things you need to do is to make sure your personal finances are separate from your business.
You want to maintain a clear separation so you can build a clear picture of your business’s performance and make the accounting process much simpler, so you need to create a separate business account.
It helps you generate accurate financial reports, makes tax preparation much easier to complete and budget effectively as you know exactly what you have coming in and out of your business.
Speaking of your budget, you must have robust measures in place to help you run your company at the capacity your budget allows and make realistic forecasts.
Having the right procedures in place means you can factor in future expenses, prepare for any cash flow challenges and set financial targets you aim to achieve.
As part of your accounting and bookkeeping processes, you should regularly review your budget and forecasts to reflect your company’s actual performance.
Once you’ve done this, you need to make changes in accordance with the actual figures to ensure your business is on the right path to achieve its targets.
Cash flow challenges are not uncommon for all businesses, but you can look at implementing credit control procedures that can help manage those challenges.
This should involve you setting clear payment terms with clients and following up with them if payments are overdue.
Those procedures must include any new clients you take on board and when this happens, you should conduct thorough credit checks to ensure their legitimacy and clarify if they have the funds to pay you.
Efficiency is something many businesses strive for and your processes should follow suit, including your accounting obligations and this is where digital accounting software can support your business.
Digital accounting software offers a streamlined approach, making sure all your data is accurate and correct, allowing you to focus on other areas of your business.
Any extra cash you can save within your company can be valuable and this is what an efficient tax strategy can give you.
Your accounting needs to include a tax management strategy that satisfies HM Revenue and Customs (HMRC) and is the most cost-effective it can be by utilising some of the reliefs available to SMEs.
However, it’s important you check the eligibility criteria before claiming for any relief and this is where speaking with an accountant can help.
Our team of accountants are here to support your business
If you want to improve your accounting and bookkeeping processes or check that they are running as efficiently as they should be, our team of accountants is here to help.
We provide comprehensive advice tailored to the needs of your business, which includes analysing your current procedures, helping you organise your accounts, exploring tax relief opportunities and giving you the tools to build a clear picture of your company’s finances.
For support with your company’s accounting, contact our team today.