For a lot of people, their accountant is someone they see once a year to put together the accounts and do a bit of a yearly spring clean. The rest of the year, you forget they exist. They are just a tool for helping you get your annual accounts submitted on time. But your accountants and general numbers-people have so much more to offer than your annual accounts and reporting. With the help of a good accountant acting as an outsourced finance department, even the smallest business can have a full finance department at their disposal, ready to help them grow their business 12 months a year.
Business Planning
As a business owner, you will have a plan to grow the business. It might not be formal or even written down, but you should still have one. In order to achieve your goals, you will need a strategic plan in place – and that includes a plan for your finances. Financial planning is a tricky thing to get right, since there are so many moving parts in place, but when done properly it can fast track your success. Your financial plan will describe each of the activities, resources, equipment and materials that are needed to achieve your goals, outline any plans for funding, cashflow and the timeframes involved to get there. With a solid financial plan behind you, your business stands the best chance of growing effectively. But these things aren’t simple to put together, which is why an outsourced finance department is an ideal option.
Cashflow Forecasting
Accurate and timely cashflow forecasting is important for a number of reasons – which is why we’re surprised so many businesses don’t do it. A cashflow document essentially helps you keep track of your finances, estimate the amount of money coming in and going out of your business, project expenses and income, and give you a full picture of the financial health of your business across 6-12 months. Cashflow forecasts can also be done on a shorter-term basis, like a week or a month, to give you a finer view of what’s going on. With the help of an outsourced finance department and their cashflow reports, you can see whether your business is meeting expectations, budget more effectively and understand where your money is going. You can also use the forecasts to see what making changes to the business would do to your cashflow. For example, if you’re looking to hire a new employee, you can run a financial model to see what paying that salary would do to your finances. If you wanted to make investments, you could see what that would do too. With a range of tools available, cashflow forecasting can help businesses manage and maximise their growth at every stage – not just once a year.
Real Time Finance
Most importantly, your outsourced finance department can give you important financial insights into your business in real time, so you don’t need to wait until your end of year accounts to see problems developing or patterns emerging. Instead, you can have data from the past year, month, week or even day at your fingertips when you need it. Real time financial data lets you make intelligent, informed decisions about your business, from when to switch suppliers or negotiate new deals, through to which products or services are selling well and which aren’t. A good outsourced finance department can help you improve your business processes and profitability, one decision at a time.
At Purple Lime, we work with business owners who want to improve the way their business is run at every level. The people who want more from their accountancy partner than a single output once a year, and instead want to dig into their financial data to make real changes to the business. Our range of services can provide you with real-time financial data, reports and advice, putting you in control of your business. We become your finance department, helping you understand the numbers in your business and helping you forecast for the future. To find out more, just get in touch with the team today.