Now that half our advent calendars have been eaten and the Christmas songs are on a loop, it’s safe to say the countdown to Christmas has begun. With most business getting ready to turn that out of office on and begin their festive celebrations, it’s important to take the time to look back on your year of business and prepare for the next.
In light of the festive spirit, we thought we would share our own version of the 12 days of Christmas…accounting style. We’ve broken down some our top advice for keeping your business growing and your accounts thriving.
So, here’s our ‘12 tips for accounting’, to see your business start the New Year with the right foot forward.
1. Know your Cashflow
First things first, know your cash flow. Keeping a positive cashflow is the backbone of any business existence. Understanding your cash flow is essential to maintaining a healthy and growing business. No business can move forward without knowing what’s coming and going from their accounts, and it’s important to know how a change in circumstance could affect your business. Streamlining your cashflow, allows your business to highlight cashflow tendencies and in turn mitigate negative surprises. There’s no point looking back and thinking ‘oops’. Be proactive and plan ahead.
- Cloud accounting software such as Xero, provides your business with an instant snapshot of your incomings & outgoings.
2. Review of Growth
It’s important to take the time to reflect on your past year of business and ask yourself:
- Did business grow?
- What areas of your business performed well? And what areas didn’t?
In short, it’s important to try and understand how your business has changed, whether it be for the better or worse. Implementing Key performance indicators (KPI’s) helps your business to understand where to focus your attention and where to cut your losses. This directed focus can be imperative to the success of your business.
Read our blog on ‘how an accountant can help your business grow’ for more advice on KPI’s
3. Be proactive with invoicing
Get your invoices out as soon as the work is complete, don’t wait around for the end of the month. This gets the payment underway whilst it’s fresh in everybody’s minds and gets cash coming through the door quicker.
Send invoices digitally, avoid traditional ‘snail mail’. This way you can be assured the recipient has received it. With cloud accounting software Xero, your client is sent a clickable link to their invoice, allowing you to monitor whether or not the invoice has been opened. So, you can send a friendly reminder.
4. Chase late payments
Making payments can be overlooked, especially amongst the Christmas frenzy, and sometimes a little friendly nudge never did any harm. Send a friendly reminder a couple of days before the payment is due, to ensure the invoice was received and mitigate any misunderstandings before the date.
5. Make Payments on time
Sticking with the spirit of on-time payments, make sure you are on top of your down payments. Making payments on time not only helps to avoid the repercussions of late payment charges but in turn, can improve business relationships and increases your businesses reputation.
6. Work out your tax deductions on expenses
Around this time of year, most businesses look to celebrate and thank their employees for another year of hard work. But before any business goes planning their annual Christmas celebrations, it’s important to be aware of what Christmas expenses are claimable or exempt. Check-in with your accountant and ask about what deductions and expenses are relevant to you.
Read our blog to find out more about Christmas party tax exemptions.
7. Budget for Surprise Expenses
Whether it’s replacing equipment or the sudden need for new staff there are a lot of costly expenses that can creep up on your business. The best way to tackle this is to keep a pot of money aside to cover any sudden outgoings. Plan ahead to prevent the banks from running dry.
8. Keep Records Neat & Tidy
Whether you are a stickler for order or an organised mess, when it comes to your accounts, we don’t advise the latter. One of the biggest tips we can give to any business looking to grow is to keep their books in good shape. Organised records make everything accessible and minimise time-wasting.
We know your time is precious and finding time for bookkeeping can be near impossible. If you are struggling to keep on top of your records seek some outsourced help and free up your time for growing your business.
9. Take your accounts digital
If your business is still using traditional desktop accounting software or even excel spreadsheets, it’s time to come out of the dark. Discover the benefits of taking your accounts digital could have on the running of your business. Efficiency and seamless accessibility are in our opinion the two key reasons why your business should consider the move.
Online accounting makes the accessibility of your accounts available from anywhere at any time. So, if you’re thinking of escaping for some winter sun, you can still keep track of your business finances. Monitor cash flow, make payments and collaborate easily with your colleagues no matter where you are in the world.
10. Keep your accounting software up to date
Like everything else digital, the features of accounting software are continually adapting. It’s important to make sure your software is up to date. If you feel like you want more from your accounting software, take time during the quieter periods to shop around. It’s important to find the platform best suited to your business needs.
We recommend getting to know Xero cloud-based accounting.
11. Talk to your accountant
The biggest benefit your business can have is positive and open communication with your accountant. They can only do as much as you tell them. Let them in on your plans, goals and together create a plan for the year ahead.
12. Consider a professional
And our final and biggest tip is seeking professional help when you need it. If you don’t already have an accountant, it’s something your business must consider if you’re looking to grow. This doesn’t have to be a permanent fixture in your company and can be outsourced, but this expertise is needed.
Why not consider our Virtual Financial Director service, find out more here.
