In a world where nearly everybody has a vast amount of information available at their fingertips (be it via smart phones, tablets or laptops), it is baffling how many business owners cannot say the same for their financial information.
It is understandable that people are often too busy running their businesses to deal with the ‘necessary evil’ of bookkeeping, VAT returns, PAYE returns etc. However, it is important that accurate and timely financial management information should not be discounted.
Many business owners only see accurate financial results after they have had their annual accounts prepared by their accountant. These accounts can sometimes end up being prepared nine or ten months after the financial year end – almost at the end of the following financial year.
Management accounts contain a wealth of information, depending on how detailed and accurate they are. The more regularly they are prepared, the more useful they will be. The figures allow owners to check key variances to budget so that corrective actions can occur, as well as better understand the financial health of their business.
Having access to current figures allows informed decisions to be made and the financial consequences understood. Without those figures, important decisions risk being deferred or taken in the dark. Basing any decisions regarding the future on the annual accounts prepared ten months after the financial year end can be disastrous – none of us drive our car by permanently looking in the rear view mirror!
With the advances in technology and the advent of the ‘cloud’, moving to cloud-based accounting provides even greater flexibility and freedom for business owners, allowing them access to figures wherever and whenever required, from a computer, tablet or mobile phone. Being able to update and check those figures on the move liberates the business owner from the office.
Cloud-based systems can also link to the business bank account so that bank transactions automatically feed through to management accounts, saving time and ensuring nothing is overlooked.
Sean Mitchell, who heads up Bishop Fleming’s Accounting Solutions team in Truro, explains: “Having real-time financial data to hand, together with access to a specialist adviser, gives business owners a greater opportunity for success.
“To that end our Accounting Solutions cloud-based offering is designed specifically to keep owners and managers up to date with regular management accounts and optional benchmarking reports.”
This article first appeared in the Dec/Jan issue of Business Cornwall magazine. To subscribe, click here.