1. Prepare a budget
It is important to know how your business is performing by setting a budget and regularly comparing your actual results to it.
2. Ensuring all accounts are regularly reconciled
Bank accounts, accounts receivables and accounts payables should be reconciled at least monthly, as a cross-check to ensure all transactions are accurately and completely recorded.
3. Keeping business and personal funds separate
For new businesses, a separate bank account and credit card should be set up for the business and should be used for business-specific transactions only. For established businesses, if you do not have separate accounts set up we recommend spending time setting these up.
4. Tracking accounts receivable
It is important that businesses have a policy to review accounts receivables and to follow up overdue debts. This is important for maintaining a healthy cash flow position
5. Seeking professional accounting and legal advice
Always seek advice from your accountant or lawyer on the tax and legal obligations of significant or complex transactions.
6. Getting external help
Employing a competent bookkeeper will free up your time and allow you to focus on both the day-to-day managerial aspects of the business, and long-term strategic decisions.
7. Embracing a cloud-based accounting system
The ‘cloud’ is here, and your business should be on it. The key features of cloud accounting are automated bank feeds, automatically recorded recurring transactions, multi-user access so that your bookkeeper and accountant have real-time access, and having a better chance of recovering information if your system is damaged.
8. Consistent and regular reporting of financial data
Monthly management reports and preparation of KPI reporting can give you the oversight required for informed decision-making. For KPI reporting, there are a number of accounting software add-ons that can help with this. We recommend FUTRLI as a flexible and cloud-based add-on for KPI reporting.
For assistance with any of the above actions please contact your local BDO office.
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