Small Irish Businesses & start ups become a success because it is something you love and therefore work hard at it. It does no necessarily mean you love the numbers die of the business. This can be daunting. However, accounting is crucially important to your success when first starting up.
The following are some tips to help you manage your finances successfully to ensure your businesses longevity:
1. Understand your bookkeeping and numbers
You should know what is behind each figure in your reports or statements when looking at your financials. While you don't need to know every intricate detail of business accounting, it is helpful to at least know basic accounting terms and practices. Including the following important statements:
a. The Balance Sheet: a brief look at your finances on a specific day.
b. The Cash Flow Statement: illustrates how changes in both the Balance Sheet and Income Statement affect cash.
c. The Income Statement: shows the business's progress and profit in a set period of time.
2. Keep up-to-date records
Small Irish businesses are more likely to make educated and informed decisions when your accounting is completed and up to date. Therefore it is highly important that each week you set aside time to go over and update your finances. Historically business owners had to work from slightly outdated accounting numbers because the systems didn't allow for much else.
Using tools such as XERO make this process possible in real time.
Using the appropriate tools (XERO again is a good example), this shouldn't take longer than a few minutes each day, but it will be worth it when your business beings acquiring the benefits. Up to date records create and maintain a solid look at the progress of your business, which allows you to make judgments such as if you can pay both yourself and your employees this month. Revenues, expenses and business costs need to be recorded as they happen, therefore a few minutes a day or week can save you hours in the future.
3. Create a budget
Have a go at plotting your expected income and expenses for the future. Gahan & Co. are Dublin accountants who enable you to foresee your future cash flow and make decisions based on it. Creating a monthly budget until the financial year ends can help in doing this. Compare your planned figures against the real ones as they happen. You can both monitor your actual progress against your plan, and adjust it to improve performance in the future.