Running your own business? Keeping on top of your financial controls is an essential task if you want to succeed - one of the biggest reasons for start-up failure is the inability to maintain financial discipline. And that's not surprising when you consider that most start-up business owners don't have any financial expertise. So, as a new business owner, how can you make sure you're getting things right?
Why is it important?
There's a lot more to financial control than meets the eye - and that means there's a lot for you to manage in addition to your "day job". Business owners often find themselves working well into the evenings and during the weekends to cover all the jobs that need doing, but that's an unsustainable lifestyle and, quite frankly, it's losing you money.
What can you do?
Some businesses choose to hire-in financial expertise. This can be a good option if the business is big enough to have a finance department or someone permanently responsible for it; but for most small businesses, permanent employees represent a significant overhead - and so can be an expensive way of dealing with things. The other answer is to outsource some or all of your financial tasks, which are likely to include some or all of the following tasks:
- Account set up/credit checks
- Expense management
- Bank reconciliations
- Company credit card management
- Payroll processing
- Account payables (payments creation)
- Ecommerce payment processing
- Account receivables (debtors follow up)
- Credit control and late payment chasing
- Enter transactions
- Help prepare your quarterly or annual taxes
- Run reports on spending patterns
There are two main areas that are most often outsourced to finance professionals: bookkeeping and general business finance. Let's look at bookkeeping and business services and how they can help you.
Bookkeepers have specialist finance skills, along with the attention to detail that you need in order to make sure that your business is financially stable, that your invoices and purchasing processes are in order, that you pay your staff on time and payments are chased when necessary. Bookkeepers will also run a range of reports, so that you can see how your business is operating and plan for the future. Bookkeepers also work with your accountant, tax adviser, HR and other professionals to help your business manage all financial aspects smoothly. Because it is a specialist skill, it's a good idea to take the time to source a bookkeeper who can work closely with your business to keep its finances in order and support its growth.
Whilst bookkeeping is part of your business finance process, there are other areas that need professional oversight too. These include:
- Expense management
- Credit control
- Tax returns
These are good tasks to outsource simply because they are both important and time-consuming if you don't have the skills to manage them. Rather than spending hours preparing, sending and then chasing and reconciling invoices, why not outsource to someone who has the expertise to run your invoicing process quickly and smoothly on your behalf? You know that the job is being done - and you can concentrate on the parts of your business that you really want to be involved with. Put this together with your outsourced bookkeeping, and you can be confident that you are retaining tight control over your essential finance tasks without having to commit the time yourself.
Things to think about when you outsource:
- Which tasks do you want to get rid of?
- Can your chosen service handle all of these tasks?
- Do they have the skills and capacity to take on a wider range of business finance support if you need them to?
- Can they adapt as your business grows?
- Can they work well alongside other people in your business?
- Do they take the time to understand your goals and are they prepared to work towards them with you?
- Do they offer a flexible approach and real value for money?
- Are they able to work with your existing financial software?
- Do they have systems in place to ensure your financial data is secure?
- Do they have non-disclosure agreements in place to protect your business?
- Can they offer other services alongside finance that help to remove the admin burden from you?
Choose the right outsourcing partner and they can become an essential part of your team and a real boost to your business's growth - which has got to be a good thing. Article kindly provided by inn-control.co.uk