Even the most successful business can fall into ruin if a sharp focus isn’t maintained on expenses and of course, the more successful the company, the more complicated it gets. The fintech revolution is making things easier in many ways, as long as you are clear about the fact that nothing stands still, your fintech will need constant updating and your business always needs to be prepared to move on to new and better systems as they appear.
Be in control of your annual accounts & use appropriate accountancy software
Accounting software is essential when it comes to annual accounts. All UK businesses with an income above the VAT registered threshold, currently £85,000, are now required to keep digital records and file digital returns. There are dozens of accountancy software packages available and new ones are coming onstream all the time. Choosing the accountancy software package that’s right for your business is a key decision and one which should not be rushed. Be clear about what exactly you want the package to do; the more comprehensive the system, the more expensive it is likely to be. Do you need industry specific software? What is the level of support provided? Can the system be easily upgraded? Is it secure? Is it compatible with other systems? These are all questions which need exploring.
Back up your records
Research by Beaming suggests that as many as 4 million UK businesses are at risk of losing important data as a result of poor backup. Seventy per cent of small businesses which experience a significant data loss, go under within twelve months.
Never mix business and personal finances
Firstly, it looks unprofessional, and secondly, you’ll create a time-wasting tangle when it comes to sorting out your taxes.
Track efficiently/ track employee spending
If expenses are badly managed, your finance department will waste huge amounts of time and money trying to make sense of the mess. Whatever system you use, it must be transparent, understood and efficient. One area which has been particularly wasteful, in the past, both in terms of time and money, is employee expenses. Research suggests that £1.9bn of fraudulent claims are made in the UK each year. Employees often have an imperfect understanding of what constitutes a legitimate expenses’ claim and there can be a culture in which inflated expenses are considered a ‘perk of the job’. Prepaid credit cards are a multi-user fintech solution which enables employees to have financial autonomy and employers to have a real time overview of spending. The cards are loaded with a specific budget, so that overspending is not possible, and staff can be allocated funds appropriate to their level of responsibility. Employers can adjust budgets, impose spending limits under headings, freeze individual cards by means of a mobile app and employees can use the app to photograph tickets and receipts and upload them to the system.