Finance in the early day of a business can be particularly stressful. It can be hard to obtain as a new business and cashflow is usually very tight as the business establishes itself and overcomes set up costs.
Many businesses do not have someone to run the finance function at this stage and it is often fit around the other tasks by the owner.
If a business is vat registered it is important to keep everything up to date for quarterly vat return submission. If not vat registered it is still important to keep everything up to date so that you can make good business decisions and keep tight control over cashflow.
There are many online software solutions that will allow you to input data easily, often included a bank feed so that your bank is always up to date. Sales invoices can be raised instantly if you have internet access and often you can link this to card payment systems to get payment as quickly possible.
Expenses and other purchase invoices can be posted directly into the system using something like the receipt bank app so you have the best chance of all of the information hitting the system rather than dealing with lost purchase invoices.
It is unlikely that you will have time to process everything weekly if you don’t have a person for this function but most people can at least keep on top of the bank and sales invoices which leads to up to date debtors so that you can make sure that customers are paying within your credit terms.
You can also often set up alerts so that when the bank balance hits a certain level for example you are alerted to it.
Even if you cannot afford someone to cover this function at first it is advisable to get advice and training from an accountant regarding set up and use of the software and general principles about vat and what can be claimed. Your year end accounts fees may also be cheaper if you are presenting reconciled information to them.
As the business gets more established and cashflow improves you may decide to get someone to cover the finance function so that your time is being spent in the area that gets the most results for you. You are likely to want more tax advice ongoing and may also want more reporting. This may be budgets or targets or project by project analysis.
When making tax digital comes in and quarterly information is submitted to HMRC you may want someone to review what is being done even if they are not doing the processing.
Good information is key at any point in the business cycle and keeping up to date and having timely reporting in the finance area should allow you to make good decisions so that you can achieve the ambitions that you have set for yourself and the business.
Next week we’re covering our final area – strategy