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FreeAgent's talk about why accounting is like brussel sprouts, delivered by Matt Perkins at the Running your business in the cloud event on October 10th in London
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Let’s talk about accounting
Accounts are like brussel sprouts!
Very few people enjoy them!
Most people avoid them!
Once a year you have to face them!
Forget about the accounting!
It’s not about creating work!
It’s not about compliance!
It’s about powering your business!
Two fundamental truths…Whatever you want to achieve with your enterprise, you can
only do it with a viable business model.
Even with a viable model, unless you get the money in – quickly and efficiently – you
will fail
The figures are so important!
Consistently in top 10 of failure surveys:
• Poor cash flow management
• Inability to pay tax/wages
• Overspending• Poor credit control• Insufficient funding
Why is that not surprising?
63% Had no formal accounting procedure in place
Source: NatWest survey, May 2011
46% unaware of break even point
49% don’t know their gross profit margin (KPI)
61% said cash flow issues were their most significant challenge
Stop talking about
accounting!
Let’s look at it from a different angle!
And wasting130 hours (3 weeks) a year chasing payments
Source: BACS Payment Schemes 2012
In 2012, the average outstanding debt for an SME was £45K….
They were also waiting an average of 30 days past agreed payment terms for their money…..
Two Golden rules:
1.It’s not a sale until they’ve paid!2. Get paid as quickly as possible!
change“technology changes; people
don’t ”Deb ShultzBu
sinesse
s
“Cloud” innately means...
collaborative
real-time
connected & present
E-invoicing
CompaniesHouse
Banks
Accountancy
HMRC
Financing etc
Ecosystem
E-commerce
Web apps, APIs
What does that mean practically?
We have the technology
We just need to change the mindset!
2. Keep track of who owes you what.
What 4 things do all business need to do to get
money in?
3. Take payments
1. Invoice your customer –•Professionally•Accurately•Efficiently
4. Keep on top of late payers
Chase payments consistently
Tips to keep on top of your finances
Invoice in a consistent manner
Tips to keep on top of your finances
Make it easy for customers to pay
BACS
Payment buttons on invoices
Direct Debits
Mobile
paymen
ts
Chip & Pin
Tips to keep on top of your finances
Keep track of business expenses incurred
Tips to keep on top of your finances
Keep track of taxes (inc VAT) owed
Tips to keep on top of your financesReview your financial position
regularly
Matt PerkinsHead of SME Engagement
matt@freeagent.com@perkinsmattj
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