If you think that the uses of business accounting are limited to final year figures and the means to complete and submit your tax return to HMRC, then it's time you woke up and paid attention to the real reason you should be staying on top of this essential business tool. It pays to remember that accountants can offer additional help apart from the annual matter of filing your tax return - they're also worth their weight in gold as business advisors, because they can use your figures to show you exactly what you're doing right, and where you might be doing wrong.
Business advisors need the figures to give you the facts
It doesn't matter whether you use business advisors via an accountancy company or a member of your own staff, but either way, you need one if you want to manage your business to the best of your ability. The importance of having someone who can take an objective view of your business performance can't be underestimated. If you're not up to date with the numbers, how can you be sure that you're doing ok?
A successful business is one that's run on the figures - these are your true performance indicators, the facts that tell you whether you're making a profit, struggling to stay afloat, or just bumbling along. Your accountant or business advisor can provide all kinds of information by using the facts contained within your financial records. You can ask for data to be presented in a monthly format or quarterly - and your entire business year figures will also come in handy for much more than just the tax man.
Meeting targets and tightening belts
It makes absolutely no business sense whatsoever to avoid the facts. Good business is all about setting targets and meeting or exceeding them - if you're falling short, your accounts and data reports will show you where, so you can work out why. By organising your financial data you'll be able to analyse where your money is going and how you could cut down on your overheads. By analysing the numbers, you can work out where you might need to curb your spending or perhaps even see where you need to invest more time or money.
No matter what your specialism or sector, your bottom line is pretty much everything; you need to see what's happening with your profits, or losses, and then develop robust strategies to make sure that the profit increases and that you're not losing money - business accounting provides the tools to do just that. By letting your business advisors play around with the numbers, you'll increase your company's ability to budget effectively and ensure that everything is running as smoothly as possible.