Thursday, 30 August 2012

Ensure your finance system is in order from the start

I was today working with a recent start up in the leisure business. My business has recently been asked to set up a finance system for them and integrate an office finance model with how they use Sage. Why were we asked to help? Well 3 months in, they thought they would save some money and do the accounts themselves. The result is they lost the opportunity to claim back VAT on some of their upfront costs. They lost receipts for items paid for personally on behalf of the business restricting their ability to claim back the spend. However more importantly they had been sold a bookkeeping package that they could not operate, had not set up correctly and has no chance of receiving any useful information or reports from it without help like ours.
An effective finance system from the start will show its benefits very early on. Not only will your records be accurate, many good accountants fees will recognise the quality of your day to day systems with the level of their proposed fee. However most importantly is the ability to use your financial information to make key decisions during the early months. Can you spend x? Is the business performing to the margins planned in your forecasts? Are your overheads as expected? Making the numbers work in your business from the outset is critical.

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