It is that time of year where everybody pledges to change their lives for the better. Almost everyone in the country waking up on New Year's Day will have promised that 2012 will finally be the year where they cut down on the bad foods and alcohol and get to the gym more. Unfortunately for most people their New Year Resolutions lie in ruin before the end of January! Why? Because New Year's Resolution's always have a habit of pledging huge change to normal everyday life which is unrealistic and unsustainable. These New Year Resolution's also take place in the world of business. There will be strategy meetings kicking off all over the country in the first week of the year promising all manner of different strategies to become 'market leading' or 'best in class'. But as with our personal resolutions too often these business strategies are too big and too bold to be sustainable with many failing to be truly realised by the end of the year.
As we head into 2012 the economic landscape is still very challenging and if there was any New Year's Resolution to be made by a small business owner it should be to achieve financial sustainability in 2012. This article is about how accounting software can help small businesses achieve this New Year's resolution and encourage small businesses to manage their finances to prosperity in 2012.
4 New Year's Resolutions for any small business owner in 2012.
1) Don't spend unnecessary time and effort on non-value adding activity
Do not waste time on things that are not going to generate additional profit for your small business. TIME = MONEY and in the current economic climate both items are extremely precious resources. As we approach the end of the financial year do not fall into the trap of taking time out of the business to pull end year reports together. Accounting software can provide a quick, easy and cost effective way of pulling end year reports together professionally without having to spend time out the business. The more time that is spent focussed on growing the greater the chance the business will achieve long term success.
2) Get closer to your company financials
There are many small business owners that are not close enough to the cash flow position of their business. Even if a small business owner is not comfortable looking through pages of financial balance sheets accounting software can enable a small business owner to quickly and easily view the key financial indicators of the business. Short term cash flow problems can have devastating effects on the long term success of an SME. The owners that are closer to the key financials of the business stand a better chance of being ultimately successful.
3) Track and manage income lines into the business
Making sure that all income lines into the business are well-managed is of utmost importance. Companies without meticulous collection processes are at risk of their invoices being paid late if at all. In order to ensure that the lifeblood into the business, revenue, comes in as planned accounting software can organise all invoices and clients making it clear and simple which invoices are due and who is left to pay. This way a small business always keeps the finger on the pulse when it comes to collecting income.
4) Have a tight grip on company expenditure
Every penny counts and making sure that all spends are accounted for is critical to ensuring that the biggest possible margins are realised by any small business. All structured company expenditure should be evaluated to ensure it can't be consolidated or eradicated entirely whilst supplier rates should always be assessed and managed in line with company profits and scale. Sometimes the most profitable companies are not the ones generating the biggest contracts but the ones with the most controlled expenditure.
Buying accounting software will not categorically guarantee business success but it will enable owners of SME's to get a lot closer to their business financials to help them make better decisions for their business. It will be the small business that methodically manage their finances that come out of this economic austerity stronger; therefore, whatever your business New Year's Resolution make sure you go into 2019 with the intention of making your business financially sustainable in these challenging times.