How to get your new business’s finances sorted in 5 steps
Starting a new business is exciting and rewarding, but there’s lots to juggle, and having well organised finances is dull but really important.
Building up a list of clients and customers, and keeping them all happy, is extremely absorbing in the early days of a new business. The thrill of creating something and growing it can make the struggle of getting established all worth it.
During this stage, it’s easy to put financial management on the back burner, particularly if you’re quite new to it. New businesses need financial management right from the start to prevent future problems, so here are five things any new business owner can do to stay clued up on their finances.
Choose the right online tool
Setting up a good accounting system isn’t as hard as you think. There are lots of flexible and easy to understand tools out there, helping you keep track of expenditure and income, record it properly, manage cash flow and budget, and those all-important first year accounts.
Relying on spreadsheets to manage your accounts might seem like the obvious place to start, but you’ll have to do a lot of the formatting and calculating yourself.
Accounting software does all the admin for you, and can run on a specific laptop or desktop, or online from any device.
There are a few advantages to cloud-based software:
- Accessible from anywhere with an internet connection, rather than being tied to the office.
- Automated invoices and (sometimes) invoice reminders.
- No printing, no storage space, and generally quite cheap.
- Dashboard view of cash flow that’s easy to understand.
- Scan receipts and invoices with your phone while out and about, so you never forget your expenses.
- Export information in different formats for accountants.
You don’t need software that shows off
Your first accounting system doesn’t need to look like mission control. You want to be able to let it look after itself as much as possible.
Systems can get more complex as the business grows, but don’t be lured in by the fanciest dashboard, or by services that aren’t needed. Like other aspects of running your business, accounting services need to be fit for purpose, not bloated and expensive.
To get an accountant, or not to get an accountant?
It’s never too soon to get an accountant. Your business will need one as it grows, and it’s better to have one in place so they know all the ins and outs of your accounts from the start.
Choose an accountant with experience working with both startups and small businesses, and make sure they’re willing to support and advise as the business grows. Recommendations are really valuable, so ask around, and don’t be afraid to interview a few different accountants before making a decision. The relationship needs to work well and you need to trust each other.
Still not sure is you need an accountant? Our previous blog Do I really need an accountant might help you decide.
Remember you’re still the boss
Your accountant will take care of the figures, but how those figures affect your business’ growth is up to. You’ll still need to watch your cash flows, ensure invoices are paid, and look ahead to see if any big expenses will come up.
If the admin is too much, you could employ someone for a few days a week to take care of the routine accounts stuff. A lot of online accounting software has the option for multiples users with different permissions, so you can make sure the actual decision-making stays with you.
Read our latest guide to learn more about managing your small business or startup from an accounting and finance perspective.
The best accountants often come by recommendation. Ask your local Chambers of Commerce for support, and ask your friends in business for their advice and recommendations too.
We’ve also put together the ultimate guide to choosing small business accounting software, so you can get organised without spending loads of time on those free trials.