At Evans & Partners, we often talk about ‘sharpening the saw’. If you’ve got a blunt saw, you’re going to have a harder time getting things done than if you take the time to sharpen it first.
For the business world, that means that once you’re past the initial startup phase, you need to be organised, have your finances in control and all the right systems in place. Otherwise, you’re going to have a hard time getting things done.
It’s a hard thing to do in the best of times, and this isn’t the best of times.
Right now, businesses are contending with rising utility costs, new and confusing post-Brexit customs procedures, a rising living wage and an increase in employer’s National Insurance contributions after a lacklustre festive period.
With all that, It’s no wonder business confidence is so low.
So, now is the time to take stock of the situation, get organised and bang your team’s heads together so you can weather the storm and move past your start-up phase.
Budget
You’ll probably remember creating one when you started, but before you go anywhere further, it’s time to look again.
As a reminder, a budget is a detailed representation of the future results, financial position and cashflow you want your business to achieve during a certain time period, usually a year.
Specifically, it involves identifying which resources are available to you and allocating them to different parts of your business.
This will then give you financial goals to achieve and revise during your next budget process. In that sense, it’s all about long-term planning.
A proper budget – which may even take up to six months to put together – will bring insight and clarity to your business and inform everything you do.
If you involve your staff into the process, you’ll persuade them to be more economically minded and clearly define budgetary responsibilities.
A strong financial situation is key as you enter the next stage of your business.
Forecasts
To make sure you’re on the right track, you should create regular forecasts, which record what you are actually achieving at any given moment.
You can then use the trends to predict what the future of your finances look like – if they don’t match your budget, you’re in trouble.
One of the most important types of forecast is a cashflow forecast – important, because a positive cashflow is essential for any business.
Our forecasts take different levels of incomings and outgoings so our clients are always prepared. We suggest you do the same.
We would also suggest you look into management account services, which combine your financial data to give you a clear insight into your business.
Automate your processes
Making the most of technology to streamline your systems and processes with automation is a must if you’re serious about your finances.
When we say ‘technology’ we mostly mean cloud accounting software, such as Xero.
Xero allows you and your accountant to share your business’s financial data in real time so they can advise you with the latest information at hand.
It’s far more time-efficient than regular old spreadsheets, which are difficult to transfer and easy to get wrong, especially if multiple people are working on the same document simultaneously.
But with Xero, everything is centrally stored in the cloud – safe and secure.
Furthermore, Xero has over 700 integrated to provide solutions to your business’s specific needs.
From payroll and payments to forecasts and predictions, you can automate just about all of your business’s systems.
Accountant
If you have an accountant, they probably do the basic compliance work.
Now, however, is the time to get them onto looking at things in more detail..
First, consider outsourcing some of your routine process to your accountant, such as your tax return, bookkeeping and even your payroll.
That way, you’ll save time that you can spend focusing on the areas your business really needs you.
An accountant will also save you more money than the fees they ask for.
You’ll be aware of tax planning, but accountants are also financial experts, having worked with countless businesses.
As a small business looking to grow, your accountant should be your listening ear, your sounding board, and your trusted advisor in the truest sense, guiding you on your next steps towards success.
Talk to us to find out about our services.
