American entrepreneur Malcolm Forbes (1919-1990) is known for his quotes on business, and one of them was ‘The best vision is insight’.
Many people talk about business owners and leaders needing to have ‘vision’ that will help them achieve their ambitions for growth and profitable development. However, many SMEs have no insight into what is happening financially in their business on a day-to-day business. Often this is because traditional bookkeeping and accounting practices are obstructing their view of their current financial performance. Yet every business needs a thorough knowledge of their numbers to plan for the future – how often do we hear the dragons on Dragon’s Den chide business owners for not knowing their financials inside out?
Without visibility over your current and future performance, you are driving into the unknown wearing a blindfold.
Here are our seven top tips to give you clear vision and insight into your business finances:
- Make sure that you have a great accounting system that uses 21st century technology – such as smartphones and cloud data storage – to be user-friendly and efficient.
- Understand how to put your numbers into this system. Software as a service (SAAS) companies such as Xero make it easier than you might think and companies such as ours are happy to help you get up and running with the business apps that are available.
- Make use of the technology to stay updated on a regular basis. It’s easy to pull bank and credit card transactions through directly from the bank and it saves a lot of time.
- Work with your accountant to get real understanding of the key reports, such as who owes you money. (I meet to many business owners who don’t use their accounting system to review this!)
- Develop a deep understanding of your business by working with an experienced professional who can guide you through the numbers that matter. Cloud accounting saves so much time when it comes to data entry and reconciliation that there’s time for a more strategic approach to business development.
- Use the real-time information that cloud accounting lets you access to prepare forecasts. This allows you to focus on achieving targets and easily see the impact of staff pay rises, customer wins and losses and other aspects that affect cashflow. No-one can predict the future with 100% certainty, but modern, automated accounting gives business more visibility than ever before.
- Work with your accountant to streamline your back office. Working together and making use of the latest technology means you are paying your accountants for offering advice that benefits your business today and tomorrow – not for retrospectively reporting your numbers from six months to a year ago.
If these tips sound like actions you want to implement in your business, but you don’t know where or how to start, give us a call or drop us an email and we’ll be happy to have a chat and explain our services and fixed-fee pricing structures. Call us on 0121 794 4009 or email us at firstname.lastname@example.org.