As a start-up company you will find that there are many challenges in running a business. Apart from marketing, business growth and product development, you have to manage payroll, HR functions, accounting and tax reporting. Financial statements must be prepared for investors, lending institutions and to meet regulatory compliance requirements. As a start-up company, you will want to minimise the costs of running the business and this means not immediately hiring a full-time bookkeeper or accountant. If you answer yes to any of the questions below, you will benefit from outsourcing accounting, tax and payroll functions:
Outsourcing the functions such as annual financial statement compilation and tax returns will help to ensure accurate reporting, on-time submission and avoidance of penalties.
Below are a few other tips to help manage the finances of your business effectively.
Set-Up a Budget
Don’t ignore the budget. It shouldn’t limit business growth, but it must be realistic. Revisit the budget regularly as it will help to keep your focus on the essentials for managing the business. It can be seen as the financial plan for giving direction regarding spending. The budget provides insight as to projected income versus the capital layout plans for expansion of your business over the next 12 months. You need to know that the income expected is enough for the expansion plans you have in mind.
Employees are Assets and Liabilities
Employees will be extremely important for the success of your business. Though you should guard against overworking employees because you don’t want to employ more people, the opposite is also true. For every employee appointed you will have additional expenses, such as office space, desks, communication costs, tax calculations, computers, HR administration and leave processing. The cost to company for each employee can be rather high.
Appoint staff members that directly add to the functions focussed on profit generation. Reduce the office administration employees by outsourcing functions such as accounting, tax administration, and payroll management. In this way you are able to keep the staff profile lean and ensure that you have enough cash-flow for business growth. You may need help compiling your annual financial statements or to ensure proper payroll management. However, you don’t need to hire a person to manage these tasks. If you outsource the functions to a company specialising in such services, you have the benefits of their expertise and the advantages of not having more full or part-time staff on the payroll.
Manage Accounts Receivable
One area of financial management where many start-ups fail is that of accounts receivable. Be diligent! Invoice relevant parties promptly and chase payment down immediately after due date. Monitor notifications regarding liquidations in the local newspapers and the Government Gazette. You don’t want to be in a cash-flow situation of not being able to pay suppliers because one of your larger clients decided to voluntary liquidate. Bad debt on the accounts receivable side can mean the end of your business.
Become Knowledgeable on All Aspects of Financial Management
Learn how to compile financial statements to ensure that you can read, interpret, review and compile accurate financial statements, which include the balance sheet, profit and loss statement, shareholders’ equity and the cash-flow statement. If you need help in compiling your financial statements simply call on our experts. You will also benefit from our consultation expertise, helping you to become knowledgeable on the essential aspects of financial management.
Cut on Expenses
Don’t be extravagant! Although the office reception is, for instance, the entrance to your business, you most certainly don’t have to invest in a Van Gogh to impress clients. This applies to everything in your business. Lease multifunctional devices rather than having printers for every workstation. Reduce staff overheads by outsourcing as many as possible functions at first. Review which marketing channels are the most effective and provide you with the best return on your investment. Don’t employ an entire team for web design, social media management and online marketing. Outsource these functions to ensure that you can focus on business growth.
Whether you need help in compiling your annual financial statements, assistance with payroll management or monthly bookkeeping you will benefit from our affordable services.