You’ve launched a new business and are optimistic about the future. Perhaps you want to focus on the development of your product or service, or on marketing it to prospective customers. Unfortunately, however, day-to-day book-keeping is an essential part of every successful start-up. You ignore it at your peril argues Jonathan Wilson of Midlands accountancy firm Barnett & Turner. If you’re a budding entrepreneur with big ambitions – or simply someone who has decided to branch out with your own micro-business – the chances are that you will have some kind of particular skill or talent. Perhaps you’re an expert consultant, a technological genius or a retail guru. But there’s no reason to suppose you’ll have any knowledge of the financial legwork that’s so important for any company.
It’s important that you catch up fast, as accurate, tidy records are not only a legal requirement, but also essential for helping your business to grow – providing you with vital information whenever you need it.
In reality, there are many different ways that a business can keep its books and your choice will probably be dictated by your size, your predicted growth and the kind of market you’re in. If you see yourself becoming a household name within a year and are planning on opening offices around the globe, a manual system isn’t really going to cut it. On the other hand, if you are running, say, a small childminding business, it probably won’t make a lot of sense to splash out £1,500 or more on a computerised system.
Costs vary widely, of course. A basic accounting software package, for instance, might be around £200 up front or £10 + VAT a month, although that figure can climb considerably if you opt for upgraded versions. Cloud-based systems such as, Xero, Kashflow and Sage One can also be chosen with different functions as well, designed to fit your pocket via Apps on your mobile and meet the changing needs of your company.
An accountant can certainly advise you and help you to analyse the various options. If truth be told, however, a well-kept spreadsheet or manual cash book can still often work just as effectively for a small start-up.
After talking to your account, you might decide to let their team take the whole book-keeping process off your hands entirely. Although this involves an additional expense, it will allow for the production of regular management accounts which can prove to be an invaluable tool when making key decisions, especially in the early life of a new business.
If you would like to discuss anything related to this article please do not hesitate to call Barnett & Turner on 01623 659659 or email Jonathan at jwilson@barnettandturner.co.uk