Here at Tax Agility we’re the first to recognise that, despite the fact that keeping in regular contact with your accountant is the key to ensuring your small or medium-sized business (SME) remains in good shape, it’s still helpful to have access to certain accountancy and business assessment tools that you can take advantage of between meetings and phone calls with your accountant.
For this reason, we felt that it was about time for us to publicly recommend some of the tools we frequently suggest our clients look into. Using any one of these tools you’ll be able to measure your SME’s performance, almost in real time, against certain Key Performance Indicator (KPIs).
Pitching themselves as “Beautiful accounting software,” we are experts in Xero’s easy-to-use platform and, should you wish to use it to keep a constant eye on your small business’s financials, we’ll be happy to get you set up in no time.
Though all accounting tools in this list can be used by freelancers, FreeAgent is the only one that is actively going after the freelancer crowd, making it easy for you to see your expenses, track the amount of time you spent on any one project, and send estimates and invoices.
ClearBooks provide a simple online application for you to keep an eye on (or entirely manage) your accounting, payroll, HR, and final accounts. Should you wish to use ClearBooks we’ll be happy to set you up on their platform.
Staying on the ‘books’ theme, QuickBooks is popular among small business owners and accountants alike, with features allowing you to accept payments, send invoices, track sales and expenses, and manage Value Added Tax (VAT), to name but a few.
What KPIs Can You Derive from Your Accounting
As your accountants here at Tax Agility, it’s our job to ensure you’re being kept up to date with the status of your Key Performance Indicators either whenever we look through your accounts, or on a pre-arranged timescale.
If you wish to assess your small business’s performance outside of these times, however, it’s good to have an idea of all the possible KPIs you can derive from your accounting tool of choice. For example:
- Debtor days: What is current average number of days it takes between you issuing a customer with an invoice and that invoice being fulfilled?
- Gross margin: What margin (the revenue minus profit) are you currently operating in? This can be calculated for individual items or your entire business.
- Inventory turnover: How much inventory are you turning over (selling) in a given time frame?
- Debt ratio: What portion of your small business’s assets are currently financed by debt? This figure is indicated as a percentage.
- Net profit margin: What is your net profit margin in a certain time frame (often calculated over a quarter or a year).
Experienced Tax Accountants
To speak with a professional accountant to discuss the best (and easiest to use) tools available for assessing your small business’s performance, contact us today on 020 8780 2349 or get in touch with us via our contact page to arrange a complimentary, no obligation meeting.
If you’re not quite ready to pick up the phone and are simply looking to develop some knowledge on the wonderful world of accounting, feel free to read our blog. More specifically, our pieces that are specific to accounting.