It’s entirely possible that your company is leaking thousands of pounds every year due to simple financial mismanagement. You’d be surprised how a few basic alterations to the way you prepare will have a great impact on your operation, saving time and therefore saving money.
To assist with this process, it pays to take a step back from the business and reassess your methods. Hiring a professional accountancy firm is the recommended approach at this point. They’ll take an objective overview of your bookkeeping and highlight areas of finance management that could be improved.
To help with the process, here are a few quick tips to help your business perform to its maximum level.
A feature commonly overlooked by business owners is the time lost by staff when conducting their own work finances. Business tech company Soldo conducted a survey of over a thousand UK companies in 2017, discovering that employees spend an average of 4.1 hours each week on invoicing, expenses and budgeting.
By crunching these numbers down, it’s estimated that the time wasted costs companies £31,732 each year per employee – roughly what it would require to hire an on-site accountant to take care of these affairs full-time. The results ultimately show that SMEs are losing a collective £8.72 billion every year.
This indicates that helping staff organise their own financial matters is just as valuable as rearranging the company structure itself. In this sense, hiring an accountant to help create a bespoke accountancy system could greatly increase productivity.
The key element of efficient financial management is forecasting and planning. This takes time, effort and a fair deal of patience to get right. By setting up a profit/loss spreadsheet and cash flow forecast, you’ll be able to assess your margins with greater clarity. Note which areas of expenditure can be tightened up and ways to address the problem, i.e. by negotiating with suppliers or buying in bulk.
We understand this process isn’t something that comes naturally to some business owners, but it’s strongly advised to have financial forecasts documented and maintained over the long term. Business accountancy software can be purchased to help with this, allowing you to update data automatically and even on-the-go with smartphone apps.
Financial mismanagement will undoubtedly arise in the form of tax neglect, especially with the new quarterly returns requiring more attention than before. Your business plan must factor in the correct monies owed to ensure there’s no nasty shocks when the HMRC come calling.
There isn’t just an issue with paying what’s due on time, but also with becoming as tax efficient as possible. This could be by making the most of your personal allowance to using your annual pension to save for retirement. It pays to contact a professional accountancy specialist who can advise on these matters, as well as ensuring your business doesn’t unnecessarily lose money due to finance mismanagement. Why not get in touch with DLR Accountants today? We offer expert accounting services and advice nationwide.