Accountants play a very important role in ensuring that your business adheres to Government regulations. But did you know there are a number of common finance tasks which, if undertaken yourself, can save you money on professional fees? Read on!
Running a business in the UK comes with a raft of unavoidable financial administration. Accountants play a vital role in ensuring that a business complies within its relevant regulatory framework, but it’s worth knowing that not every business finance task needs to be outsourced to a third-party professional.
Many day-to-day book-keeping duties are simple, routine and cost-effective to manage yourself, whether you use proprietary accounting software or not.
In this blog post, we set out the key financial tasks that can be handled entirely in-house, saving your company what might add up to significant sums on accountancy fees.
Raising and dispatching invoices
Getting the bill to the customer is top priority when you’ve supplied goods or services. Invoicing wizards are already built into the majority of bookkeeping software packages, but if you don’t use one of these systems, there are also ready-made invoice templates available in MS Word.
Using these, you can easily create VAT-compliant invoices, including job & customer reference numbers, payment terms and due dates.
You can also offer customers online payment links to make sure that paying your bill is as straightforward as possible.
Accounts receivable
Dealing with slow or late payers is a fact of business life unfortunately. However, chasing payment of unpaid invoices doesn’t require any specialist skills other than organisation, prioritisation and tenacity.
Set yourself a weekly (or more frequent) reminder to check the status of all your invoices, and the moment one falls overdue, send a follow-up reminder or a statement of account. Make a phone call to speak directly with the bill-payer to ensure there’s not an issue.
For repeat offenders, don’t hesitate to charge late payment fees (as allowed under the Late Payment of Commercial Debts (Interest) Act 1998.
Keeping your debtors in line is vital for healthy cash flow.
Accounts payable
Staying on top of bill payments helps you avoid late fees and build positive relationships with vendors. You will be surprised just how much your suppliers value prompt payment and how often it will lead to them ‘going the extra mile’ for you when you need a quick turnaround on something.
You can easily manage supplier payments and recurring expenses using any book-keeping software package or just by using a simple manually-completed spreadsheet, cross-referenced with bank statements.
For added control and to establish a useful audit trail for future reference, make use of digital tools to archive copies of purchase invoices and receipts.
Recording everyday transactions
Logging daily business activity like customer payments, supplier bills and operational expenses is at the heart of business bookkeeping. Maintaining up-to-date records ensures your business stays tax compliant and prepared for quarterly VAT returns if you're so registered.
If you are VAT registered, you can even file returns directly to HMRC without an accountant. Many UK businesses now do this quarterly using standard business book-keeping software packages.
Record-keeping
HMRC requires businesses to keep records for at least six years. While your accountant will need access to this information at financial year-end, it will help them enormously (and reduce the number of hours they bill you for) if you can digitise and organise these documents yourself.
Scans and PDFs of such documents in date order and stored in an easily available Google Drive or Dropbox will pay dividends out of all proportion to the small amount of time expended.
Creating simple financial reports
Running basic reports like the company balance sheet, profit & loss statements and cash flow forecasts is as easy as clicking a button in most SME accounting software applications. These outputs will give you an instant real-time snapshot of your business’s performance and outlook.
And, as you might expect, MS Excel offers a variety of templates which will help you put these reports together yourself if you don’t use specialist software.
Bank reconciliation
This process involves matching your business records to your actual bank statement. Most accounting platforms feature automatic bank feeds for speedy comparison, automatically highlighting duplicates or missing entries.
Depending on the quantity of transactions carried out by your business, it’s straightforward enough to do this manually. Carrying out this task weekly will highlight any irregularities and keep your accounts accurate for HMRC reporting.
Now – here’s where an accountant is definitely required!
We have listed a number of straightforward tasks that most business owners could undertake themselves, but there are unquestionably areas where professional support and guidance is always necessary.
These include hugely important pre-requisites such as self-assessment, corporation tax, year-end accounts, complex payroll environments, tax planning advice and audit preparation.
A combination of qualified third-party support and do-it-yourself management (in the right areas) could be a winning and cost-saving formula for your business.
Birmingham City University offers some excellent further resources designed to support SMEs in improving efficiency and maximising profitability. One of these is the renowned Help To Grow programme, which has provided valuable business insight and guidance to hundreds of UK companies.
Click the button below to find out more.
