How accounting can help your business
As a small business owner, doing your accounting can seem like one extra job to deal with. But, beyond compliance, there are a lot of benefits to your business when you do your accounting regularly.
Understand your performance
Doing your accounting regularly will give you the information you need to understand your business. By keeping an eye on your finances you will begin to understand the performance of your business.
The best way to start is with a financial health check, which you can either do yourself or in collaboration with an accountant. You can see how your profit and cash flow are doing. Plus, this is the first step to creating a business budget which you can follow to make sure your business is on track.
The most important thing is to keep up with your accounting and not leave it to the last minute. If you use an accounting software with automated reporting, you’ll be able to check in whenever you want to get the reports you need. The insights you can gain from reporting will help you run your business strategically to make a profit.
Find out how to check the financial health of your business
Make the right decisions
Once you have performance insights from your accounting, you can start to make the right decisions to help your business thrive. Identifying problem areas or where you’re doing well and take action. For example, you may need to cut down on expenses to save money, find late payments you need to chase up, identify loyal customers or best selling products to target, or see where you have money you can invest back into your business.
Plan for the future
When you have an overview of your finances and have the information you need to improve your business in the short term, you can also plan for the future. Seasonal trends will become easier to identify so you can be prepared for the years ahead and adjust your marketing accordingly. You’ll also be able to make growth projections for the coming years, and review them as your business grows.
You can use your accounting to create a business budget, set sales goals and see when you can invest for the future. On the other hand, if you need to bring more money into the business, you’ll be able to make an informed decision if you choose to gain financial backing.
Prepare for your taxes
By doing your accounting regularly you’ll be prepared for your taxes without any stress. When you have all the financial information and materials you need to submit your return, you won’t have to leave anything to the last minute. You’ll also be able to plan ahead and set money aside for your taxes so you won’t have any surprises.
If you need to submit your VAT Return with Making Tax Digital using an online accounting software like Bokio is a simple solution. When you do your bookkeeping with Bokio you can generate an automated VAT Return which you can submit to HMRC in just a few clicks. You won’t need to do any complicated calculations, and you will be compliant with MTD.
Read more about the different taxes that might affect your business
Secure financial backing
Gaining financial backing for your business can help you take your growth to the next level. Loans, grants and investment can all give you more funds for your business, and accounting could help you secure them. By having a close eye on your finances you will know how much money you need, and how much is realistic to borrow if you’re gaining a debt.
When you apply for finance, you’ll often have to present a business plan including a business budget. You can use your regular accounting to create a realistic budget backed by data which could help you get the financial support you need.
Read more about different ways to finance your small business
Do your accounting with Bokio
With Bokio accounting software, you can do your bookkeeping, invoicing, and manage your finances in the same place. We have everything you need to help you prepare for your Self Assessment tax return, submit your VAT Return for Making Tax Digital and keep the right financial records. You can invite your accountant to work with you in Bokio, or we can help you find one if you need a helping hand.
Accounting is kept simple with Bokio, so you have more time to spend running your business.
