What is the first thing a company director should do when starting a new business?
If you’ve just formed a limited company, one of the first and most important things to do is set up effective systems to support your efforts and facilitate growth. Although accurate management information is important in relation to the business as a whole, one area that needs particular attention is the company’s financials.
Keeping detailed records of the basics - invoices and expenses - means tax returns are accurate and you can take advantage of any tax breaks available. This is advisable not only to meet HMRC requirements, but being able to see your working capital situation at a glance informs other decisions and keeps the business on track.
What do you need to consider?
When thinking about the financial aspects of your business you’ll need to consider various factors, including:
- How many transactions you’re likely to carry out during the month
- Whether you’re going to employ staff now or in the future
- If you’re prepared to carry out any bookkeeping and administration work yourself
- How you’ll remain compliant with HMRC
Limited company financial administration is time-consuming, but effective systems play a significant part in your ability to grow sales, manage employment issues, meet your liabilities, and strategise for the future.
So what type of systems and procedures might you need to set up?
An integrated system
A secure online system that integrates all business areas and holds information in one place has the potential to become the cornerstone of your business, offering agility and supporting long-term growth.
The main benefit for you as a company director is the quick and easy access to important management information. You can check which customers regularly pay late and take action such as reducing their credit limit, spot upcoming cash shortages and secure alternative forms of finance if necessary, or simply be aware of your company’s bank balance on a daily basis.
Depending on your company and industry, you may require only one or two of the following business areas to be included - some businesses will need them all:
- Bookkeeping and accounting
- Credit control
- Asset register
With so many sophisticated software applications on the market these days you may need to trial a few options to find out which best meet your needs - it’s also a good idea to seek professional advice in this respect.
Do you need an accountant?
Limited company accounts can be complex, and with the threat of hefty HMRC penalties for mistakes and late payment, it makes sense to find reliable professional help. A dependable and trustworthy accountant can save a business more money than they cost, but it’s also difficult to know where to start looking.
Handpicked Accountants can help in this respect by providing a shortlist of qualified accountants in your area. We base our recommendations on longstanding professional relationships with accountants nationwide, and only refer practices where we know strong working practices and high levels of client care are offered. Please contact one of the team to find out more.