Sending out invoices, handling receipts, cash flowing in and out of your business.
All of these things are standard practices for any enterprise and their business account management, but the difference between a business that is struggling and a business that is flourishing isn’t always due to revenue and economic growth.
When a business’ financial accounts are organised, easy to understand and accessible, the foundations of an SME are strong. And it’s this essential groundwork that propels successful businesses forward, leaving others scrambling in the dust. The ability to evaluate the financial stability and situation of your business is important for multiple reasons including:
- Monitoring profits and losses
- Business decision making and future planning
- Information for investors, stakeholders and your employees
It’s for these reasons that more SMEs than ever before are turning to easy to use accounting software to monitor their financial status, keep on top of their tax obligations and keep their business moving forward. So, with this in mind, let’s explore the top reasons why business account management is important in more detail.
Understanding your financial position
As the fiscal year progresses, the data and information you gather as part of your business accounting obligations create a picture of your finances and the economic position you’re currently in. Gathering this data over time can be time-consuming and – when it comes to analysing what you have collected – difficult to decipher. By utilising accounting software, an accurate image of your financial position is created, giving you a stronger insight into your liabilities, assets, and your capital, which moves us onto our next point.
Future decision making
Establishing a strong picture of your finances isn’t quite the same as using a crystal ball, but with good account management, you get the next best thing: a priceless insight into smart and tactical future decision making. Decisions such as changing the prices of your services or products, investing in new equipment, expanding your employee numbers and other business opportunities are all based on your accounting information. Therefore, keeping your accounts ordered and well-managed is essential.
Tax compliance and legal requirements
It’s a legal requirement to keep your business tax compliant and to keep accurate and accessible records. These documents should be available to share with stakeholders, tax authorities and other legal bodies at any time. Failing to do so, could leave you and your business in legal trouble, something which is incredibly damaging to your reputation. Using accounting software to manage your business accounts will keep you compliant and keep your records easy to decipher and accessible.
Detect and avoid fraudulent behaviours
Good business account management means any discrepancies within your finances are immediately highlighted. When employees, partners or customers are aware that your account management is lax, it leaves the door open for them to take full advantage of your success.
Keep your cash flow – Flowing!
When your business accounts are professionally managed, your cash flow will (hopefully) never run dry. Efficient record-keeping using accountancy software is a simple yet effective way to keep your business running and moving forward in a positive direction.
Keeping accurate and efficient records via accountancy software can help create a solid foundation for your business, for today and the future.