What do you need to think about when it comes to accountancy for growing businesses?

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How can my Accountant help my business grow?

As your business grows, your needs change and therefore the service with your Accountant should reflect this growth and change. Stanley Fowler, Assistant Manager in our Corporate & Audit team answers some of the questions clients ask us during this phase.

How can I ensure I keep on top of my finances as my business scales?

Keeping on top of your finances stems from having the correct systems, processes and controls in place to ensure that you are in a position to monitor your finances as and when you need to, which at this stage of your business should be regularly. To assist with keeping on top of your finances, we would recommend that management accounts, budgets and cash flow forecasts are prepared and monitored, this will allow you to identify areas of weakness and any future shortfalls.

How does reliable financial data help in business decision making?

It is vital that the numbers you have available to you can be relied upon. You may have been completing your bookkeeping yourself to save costs or to keep a close eye on things, but now that the business is growing you may want to look at finding someone else to look after this for you. The best option would be to find an experienced bookkeeper who can take this on for you, finding the right person to complete your books will enable you to rely on the numbers you are looking at, as you can be confident that they are accurate.

It is also vital that a reliable bookkeeping software is being used, there are many too choose from, and you have to find the one which suits your business. At Plus Accounting, we regularly recommend Xero.

If you are looking for a bookkeeper, please get in touch and we will be able to assist.

Should my accountant bring issues or trends to my attention?

At Plus Accounting we can prepare management accounts or a quarterly review of your information, based on the work of a bookkeeper. We can identify the information to highlight any issues or trends and bring these to your attention.

Will I need an overdraft to ensure continued growth of my business?

In order to determine if an overdraft is adequate for say the next 6 months of trading, it is vital that budgets and cash flow forecasts are prepared. Preparing budgets and cash flow forecasts will allow you to forecast your cash requirements for the next 6 months and therefore determine whether the level of your overdraft is adequate or if you need to look at other methods of financing and/or investment.

Will I need management information when speaking to my bank about raising finance?

Having the correct systems and processes in place will mean you are already preparing management information or be in a position to quickly prepare the information the bank require. At Plus Accounting we can prepare management accounts or specific management information required by the bank, based on the work of a bookkeeper. If you are required to provide management information and would like assistance, please get in touch and we will be able to assist.

Can I create more profit in my business by doing something smarter?

Preparing and reviewing management information can allow you to create more profit by identifying previous trends. It will allow you to identify which departments, products or services are more profitable and should therefore be focused on. It is important to be preparing the correct management information so that you can ensure you will be able to identify trends.

How can I build more value into my business?

One of the ways to build more value into the business is to increase the profits that the business is making. You should also be looking to recruit the best staff possible in ensure you are offering the best service possible and reduce the reliance on the owner of the business. Reducing the reliance on the owner builds value into the business as it means the business can continue to operate if the owner is unable to work for a period of time. Ensuring that the business can operate without the owner also increases the attractiveness of the business in the event of a sale.

How should I structure my medium-term funding requirements?

In order to structure your medium-term funding requirements, you will need to produce a cash flow forecast to determine the levels of cash that will be required. Once you are aware of your funding requirements, various options such as overdrafts, loans and investment can be reviewed.

Is it time to think about staff benefits?

It is always important to think about staff benefits and how you are retaining staff. The benefits will depend on how many staff the company has and how competitive the market is. The benefits could be in the form of cash, pensions, shares or share options, flexibility, holiday allowance, private medical insurance and many more.

How do I start to position my business for an exit?

An exit can be a long and complicated process, so a detailed plan in what you wish to achieve is a good place to start. Firstly, you’ll need to think about what you are looking for as part of the exit. Are you looking to sell the business and walk away? If so, you will need to ensure the business is operating without you to show a buyer that the business success isn’t dependent on you. Then you’ll need to think about how you are going to attract a buyer, whether that be through contacts or a specialist agent. You’ll also need to ensure that all your financial systems are in place and running smoothly, as it is likely, any potential buyer will want to take a detailed look into the finances. You will also need to decide on whether you want to sell the business as a whole or just a few areas of the business. For example, the company may own some assets which you do not want to be included as part of the sale. You could utilise a holding company to split apart the assets you wish to keep.

This is an area that can become complicated and is bespoke to each individual business, you should always seek advice from a professional.

Author: Stanley Fowler, Corporate Services Assistant Manager, Plus Accounting

Any views or opinions represented in this blog are personal, belong solely to the blog owner and do not represent those of Plus Accounting. All content provided on this blog is for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site

Date published: 10 January 2023

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