To have control over your finances when operating a small or medium sized company (SME) is essential. Having regular and accurate finance reports are the crucial areas of knowledge when deciding on the future of the business.
In these challenging times, owners of new businesses need to have an organised and clear method of understanding how their business is performing in order to improve their chances of success.
Having a bookkeeper or an accountant in house to organise this may not always be the most affordable option for a small business.
Many SMEs may opt to carry out the everyday financial aspects and the overall structuring of it themselves; while trying to juggle the multitude of other aspects needed to be addressed when setting up a new business. If there is a lack of experience in this sector or, quite simply, just no time, then the prospect of being financially unsound before the company even begins to prosper could be apparent.
By not keeping on top of finances early on this can lead to a whole multitude of problems. A recent survey suggested that there could be as much as £3.7 billion lost in charges that have been ‘forgotten’ to be invoiced within the nation’s SMEs. With the lack of control over the incoming and outgoing of a company this can quite easily happen; especially with a new company who is still unsure of what regularly needs to be charged/or paid out.
The value of keeping an eye on the books
Bookkeeping issues can quite easily arise if finances become out of control as well. Having financially sound accounting when it comes to paying the right amount to suppliers and taxes to the government is of paramount importance. By keeping a strict record from the first day of operating, a business ensures that it is limiting any chance of error or lack of compliance that could happen unintentionally.
Having a clear structure within an organisation will also help provide better communication, relationships and reputations with stakeholders/clients. Furthermore, a well organised financial structure is an integral part of being ready to do business. Having a clear indication of finances offers the scope for forecasts, targets and budgets for the future. By having the ability to look at the future in a clear and concise fashion, an SME can showcase to any potential stakeholders/clients the professionalism and potential of the business.
How can a company do this efficiently? One of the more simple measures is by using online accounting software. By having an online accounting service from the first moment of running the business, a company can benefit from software that helps them to keep on top of the business finances, providing full transparency during the most dis-organised times when operating a new business. These online services are generally simple to use and provides an accurate management system, remotely accessible by multiple users, ideal for a SME still finding their feet.