This March business and marketing expert Alan Hemingway explains the importance of keeping on top of your firm’s financial figures.
With the New Year being a popular time to start a business, you will now be in the exciting stage of it all being new and really enjoying trying to grow the business. Quite rightly this is important, but I often see with start-ups that they can miss out one of the key components of the business at this stage – which ultimately can decide whether it is a success or failure.
No matter what business you are in, you need to always know your numbers because if you do not know who owes you money, you will not be getting your cash in to fund your growth. You also need to always be aware of who you owe money to and be fully on top of what your bank balance is. You should always know how profitable you are as well and there are a number of ways you can track your financial information:
• The traditional way of using a manual cash book
• Making use of a spread sheet
• Using accounting software
As a new business you really should be looking at the accounting software. The accounting software industry is going through the equivalent of the Industrial Revolution at the moment and the traditional desktop packages such as Sage are losing out to the new players in the cloud. There are many advantages of going into the cloud:
• Cost – you can get an entry level Quickbooks Online package from around £5 per month
• Data always backed up
• You are always on the latest version
• It is accessible via your mobile
• It will do all your invoicing, expense tracking and bank reconciliations
• You can always access your P & L
• It helps to improve your business processes
• New markets will open up for you with options like a Pay Now button
• Access to Apps that give you more functions
• Improved credibility with the bank
Apps help your business become more efficient and are very cost effective. I am installing one called ServiceM8 for a client who has autolocksmiths on the road, they will be doing all the invoicing and quoting through this and their labour scheduling. All this for around £40 per month!
When you choose your accountant, ask them if they provide free cloud accounting software in their fixed fee. Hemingway Bailey do, and our clients love it!