Start your business by the book
You’ve launched a new business and are optimistic about the future. Perhaps you want to focus on the development of your product or service, or on marketing it to prospective customers. Unfortunately, however, day-to-day bookkeeping is an essential part of every successful start-up. You ignore it at your peril argues Emma Woods of Bolton accountancy firm Barlow Andrews.
If you’re a budding entrepreneur with big ambitions – or simply someone who has decided to branch out with your own micro-business – the chances are that you will have some kind of particular skill or talent. Perhaps you’re an expert consultant, a technological genius or a retail guru. But there’s no reason to suppose you’ll have any knowledge of the financial legwork that’s so important for any company.
It’s important that you catch up fast, as accurate tidy records are not only a legal requirement, but also essential for helping your business to grow – providing you with vital information whenever you need it.
In reality, there are many different ways that a business can keep its books and your choice will probably be dictated by your size, your predicted growth and the kind of market you’re in. If you see yourself becoming a household name within a year and are planning on opening offices around the globe, a manual system isn’t really going to cut it. On the other hand, if you are running, say, a small childminding business, it probably won’t make a lot of sense to splash out £1,500 or more on a computerised system.
Costs vary widely, of course. A basic Sage 50 package, for instance, might be £200 up front or £10 + VAT a month, although that figure climbs considerably – to £75 + VAT per month – if you opt for their Accounts Pro version. Sage One and Xero can also be chosen with different functions as well, designed to fit your pocket and the needs of your company.
An accountant can certainly advise you and help you to analyse the various options. If truth be told, however, a well-kept spreadsheet or manual cash book can still work just as effectively sometimes if you’re a small start-up.
After talking to your accountancy practice, you might decide to let them take the whole bookkeeping issue off your hands entirely. Although this involves an additional expense, it will allow for the production of regular management accounts and these can actually prove to be an invaluable tool, whether your business is struggling initially or starting to grow.