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Is my accounting any good?

Finance is so important to your business that you literally can’t afford to be getting it wrong, particularly as you grow. But if you’re not an accountant, how would you know if your accounting is right?

The focus here is on the accounting that’s going on every day, week, month during your financial year. If this is accurate and up to date then year-end accounts and tax planning should be as easy as falling off a log (so make sure your accountant is not charging silly money when you’ve done most of the work!).

But if the day-to-day accounting work is not being done correctly you can be in trouble and not know about it until it’s too late.

Symptoms of your accounting work being done badly might include:

  • late / no / incorrect management accounts
  • persistent cashflow problems
  • PAYE / VAT not being paid
  • suppliers forever hassling to be paid
  • customers taking ages to be paid and not being chased

Of course, these could also be the symptoms of a badly run business with a finance team that’s on a hiding to nothing!

But let’s assume that yours is a well-run, profitable business with good growth prospects. If you’re seeing these symptoms then it’s likely that you’re being let down by whoever is doing your accounting work.

And that is something you need to change – fast!

What does the world of better accounting look like?

When we work with MDs to improve the quality of their business accounting it’s amazing how much anxiety and stress disappears pretty quickly. Particularly by focusing on improving cashflow and gross profit.

Often this type of work involves a short but intensive period of:

  • bringing the management accounts right up to date
  • getting credit management working right through the business
  • looking at “pricing for profit
  • cost control
  • improving processes and systems

Towards the end of this burst of activity the accounting processes should be working on “autopilot” and everyone can concentrate again on delivering the profit and achieving growth potential of the business.

Sounds like a good place to be? Thought so.

 

Michael
@diaryofanomb