Your accounting little helper!
If you have accounting software, it has benefits far beyond the forthcoming requirement from HMRC to have digital software.
As an accounting practice we know the value of using the software packages available. It does the calculating for you, which makes it easy to see how things are progressing from month to month – you just need to be looking in the right place.
Whether you use Xero, Sage, QuickBooks or something else, most of these systems offer many tools – and often the business owners that use them, don’t even know what’s possible. That’s OK as your priority will always be delivering what your customers pay you for, but your accounting software can actually make your life easier, and really become your accounting little helper.
For instance, you can set up the system so that, if payment isn’t made by the due date, automatic reminders will be emailed. This saves you time and stress, and often your customers just need a nudge.
You can also set up recurring invoices to be generated automatically, saving you time.
You can look at the current VAT owing each month, to ensure that you haven’t spent the VAT money leaving you short when it’s due!
Similarly looking at the monthly profit figures will help you to put aside money to pay the corporation tax bill, so it doesn’t come as a big drain when the due date approaches.
Keeping an eye on your profit and loss account from month to month will also help you to review turnover, gross profit and profit before tax. This allows you to see if the company is performing in line with your budget. You can easily compare progress with the previous year and allow you to budget for pay rises, staff bonuses, recruitment of new team members, investment in capital assets and much more.
If you leave it until the end of your business year to see how your business is doing, you’ll always be looking at what is, in effect, ancient history. If there’s been a drop in profits six months ago that you weren’t aware of, that’s six months where whatever caused it hasn’t been addressed.
Cost your projects
Most accounting software offers the facility to input sales invoices and purchase invoices on a project basis. This means that you can run a profit and loss account by project. From a forward planning perspective this lets you see which projects have been profitable and those that have made a loss, so you can improve your business planning in future.
You don’t need a degree in finance
If numbers aren’t your thing, it’s easy to say ‘that’s why I have an accountant’, but your accountant should be able to show you where to look for the basic figures in your accounting software. As the saying goes ‘knowledge is power’, being able to keep track of your company’s performance, will allow you to make better decisions and, ultimately, run a more efficient and profitable business.
If you have any questions then please feel free to get in touch with our expert team today and we can help you find exactly what you’re looking for.
