Why You Might Need a Virtual Accounts Department
Every business must maintain proper accounts. If your business is not yet ready to employ a full time bookkeeper, a virtual accounts department can be a practical and cost-effective solution. Keep in mind that compliance isn’t the only reason to keep your accounts in order. In this article, GroForth’s Michelle Collins explains how implementing efficient accounting processes can enable you to:
• Escape from boring administrative tasks
• Budget for better performance
• Get paid on time
• Monitor energy and input costs
• Enhance your management skills
Escape from boring administrative tasks
Many business owners complain that administrative tasks take up too much time and pull them away from revenue-generating activities. While it’s true that administration can be time-consuming, it’s also true that monitoring income and expenditure in realtime is a great way to spot opportunities to maximise profit and nip potential problems in the bud. Today, technology provides lots of tools to assist business owners. If you’re not already using these tools, ask your bookkeeper or accountant for recommendations. The more time that you can free up from administration to focus on revenue-generating activity, the better.
Budget for better performance
Budgets are an essential planning tool. Last year’s actual costs need to be reflected in this year’s budget. Review what you spent last year and keep inflation in mind when preparing and/or updating your budgets and forecasts.
Get paid on time
Make sure that you invoice on time and make it easy for your customers to pay you. This is a really effective time saver as it minimises overdue payments which you would otherwise have to chase. Monitor what you are owed and if a customer is late making a payment, follow up promptly to minimise the risk of bad debts building up.
Monitor energy and input costs
Energy costs have become a major worry for businesses and consumers alike. Review what you are using and see if you can identify areas where savings can be made — turning off equipment that is not in use, for example. If it’s a while since you last looked at suppliers, now would be a good time to check whether you can obtain better value by switching to another energy provider. The same goes for your other utility costs.
Remember to monitor your actual costs against what you budgeted for on an ongoing basis. Reviewing your management accounts at least once a month is the best way to do this. If your actual costs are higher than expected, you need to understand why and update your budget accordingly.
Use your accounts to enhance your management skills
Your accounts system should help you track what is coming in and going out of your business day-to-day. If it is properly set up, and if all relevant information is being entered accurately and on time, your system will highlight trends and help you spot potential problems early enough to deal with them before they get out of hand. If you’re not getting this information from your existing system, it’s worth asking your bookkeeper to help you access the reports you require.
If your bookkeeper can’t provide the information you need, it may be time to look for outside help. Virtual Finance Departments like GroForth provide a range of accounting supports for companies who need to access additional bookkeeping, accounts, cashflow management and payroll services.
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