As a smaller business owner or operator, growth can present some incredibly challenging problems to you. Keeping a close eye on your financial situation is one of them. An issue that many growing business owners face is loosing that sense of control one has in the early days, when you had complete visibility of all the transactions.
As your business grows, you bring in a bookkeeper or your own accountant on-staff to look after the day-to-day finances, invoicing receivables, etc. However, sometimes you can feel a little less connected. It can be quite unnerving, rather like riding a bicycle with no hands.
Delegate your accounting or risk burning out
Some smaller businesses are happy to remain small. For most though, growth is critical and finding a way to effectively delegate responsibilities is equally critical to a business owner, otherwise you’ll simply burn out under the pressure.
At Tax Agility, we understand the situations and the struggles completely, as most of our clients are small business owners. We listen to them, assess their situations, and provide recommendations.
One common and highly-effective recommendation is encouraging small business owners take advantage of cloud-based accounting software. Most traditional accounting packages, such as Sage, Quickbooks, etc., have online solutions. One of the most popular cloud based solutions though is Xero. It’s very intuitive and easy to learn. Also, as many accounting firms, including us, can use Xero to prepare your year-end tax returns, it means a lower accounting cost for you.
Cash flow and good planning
Another visible advantage of Xero is it gives you an overall business performance. Cash flow is king. Many companies go out of business for failing to manage their working capital. With the help of Xero, you don’t need to be one of them. You can look at realistic cash flow projections based on the various scenarios your business face. This tool is incredibly powerful, and enabling you to plan well.
As your business grows, it demands more time from you and you naturally want to know where to focus your strengths on: should you focus on sales and account management? Marketing or product lifecycle? Cloud based accounting software provides many ways to create snapshot reports of your current business standing. You no longer need to wade through Excel spreadsheets to come up with your conclusions – the software has an interface that integrates your current bank accounts, credit card reports, receivables, payables, tax liabilities, VAT and more.
All of this means you can step back, have a bookkeeper or an accountant maintain your records and view your current performance through a neat and easy to use dashboard.
Digital Tax 2018
Digital Tax 2018 is another reason why you really do need to seriously consider getting your accounting in order, and quickly.
As of April 2018, the UK government is introducing the new ‘Making Tax Digital for Business’ system which requires you to provide a quarterly return and then at the end of the year and reconciliation return – so five interactions with HMRC, not the usual one. The silver lining in this case is: most of the cloud-based accounting systems, such as Xero, are planning to accommodate the new digital tax reporting system; so it should be as easy as pushing a button, provided of course, you’ve kept everything up to date!
The initial target for Digital Tax 2018 is landlords and the self-employed who typically may try to keep their business records in simple spreadsheets. If you are concerned about this, talk to us today by calling us on 020 8780 2349 or simply fill out our enquiry form. We offer the first consultation free of charge.