Why should you find your accounts interesting?
Accounting is important for every business owner as it helps them evaluate the financial performance and management of their business. Poor financial management is one of the primary reasons small businesses fail, particularly in the first year of trading. Therefore, having an interest in your accounts may be a smart decision for your business…
Accountancy is crucial for small to medium business owners as it allows them to keep track of their cash flow, gives them a rounded view of the business as a whole and is the key to growth through regularly reviewing financial statements. The main objectives of accounting are: recording transactions, budgeting & planning, decision making and legal requirements.
Lets take a look at these in a bit more detail:
Accounting enables you to maintain an accurate, systematic, and complete record of all the financial transactions of your business. This enables business owners to review, analyse and evaluate the transactions when required and reconcile their banks.
Budgeting & Planning:
As an SME you need to know your budget. Analysing where money is being spent and how to distribute the remaining profit to continue to grow your business is vital to longer term success. Staying on top of your accounts is an essential component when planning for your business and is an important component within business management.
As your business starts to grow, important decisions will need to be made, but how can these decisions be made without knowledge of the health of your accounts? Keeping an eye on your accounts enables you to make informed decisions based on current figures. Some decisions that accounting may help you with are product and service price, the resources needed to make these products or services and budgets for different areas of the business.
As a business owner, it is law that you maintain an accurate financial record. By keeping track of your transactions and income, you are able to share this information with tax authorities and shareholders when required. Keeping your accounts in check will also benefit you when it comes to filing your tax return each year, which is also a legal requirement.
Having an invested interest in your accounts enables you to keep tabs on the operating costs, and changes in revenue and dividends and ultimately make strategic decisions based on the figures. Whether you choose to manage your business finances on your own or outsource it to a provider like Seamless, knowing your figures and the numbers are the key to help your business grow from strength to strength.
If you want to know more about outsourcing your accounts and what this can mean for your business, take a look at our accountancy page or get in contact with us today!