KPMG Small Business Accounting has drafted a list of five pieces of advice for all SME owners who want to keep their company’s financial fitness on top form.
It’s hard work being an entrepreneur – if you’re not budgeting and ensuring there’s enough cash flow, you’re probably at meetings or developing your business.
Time and time again, small business owners find that juggling their finances eats up too much of their time when they would rather focus on the creative side.
1. Forecast with caution
Forecast your income and expenses as you go with cloud accounting software.
“I would say it’s crucial to be as conservative as possible when forecasting. It’s amazing how ambitious we can all be when setting targets for ourselves, but you’ve got to factor in the unexpected and allow yourself a lot of room for variance,” said Kevin House, owner at Butikku.
2. Seek smart funding
Finding affordable and flexible funding is crucial, and it’s imperative that you find the right kind of finance for your specific uses.
3. Delegate administration
“Think about how you will get the business to a position where you can work on it and not in it,” said Alice Whiteley, managing director at Yawn.
4. Find the right accountants
There are many accountants out there, and you need to find one that fits your business. A good accountant should be willing to adapt service to suit you – not the other way around.
5. Focus on cash flow
“At the moment, cash is king! In times where the market is more stable, it’s important for small businesses to build their cash reserves in preparation for the more uncertain times ahead. Businesses that have done that now will likely be benefitting from the increased financial flexibility and ability to look at opportunities that their competitors may now be shying away from,” said Mike Brown, business development director at Geo-Environmental Services Limited.
Getting on top of your financial fitness is crucial if you want your business to last for the long-haul. Planning well in advance, seeking appropriate advice, and making sure you have the right accountant could go a long way.
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