Watching The Pennies Really Does Help Says Edinburgh Accountancy Firm
According to the Office for National Statistics, one in three businesses fail in the first three years. One of the main reasons for this is poor financial management, not lack of customers or regulation or problems with recruitment or any of the other factors that can affect a business. The principal reason businesses went under was because bills were paid too late and invoices weren’t collected on time.
Obviously, given the state of the UK economy at present, this salient fact is somewhat alarming which is why one firm of Edinburgh accountants is doing all it can to help new and existing SME’s get off on the right foot when it comes to managing their business finances from the word go.
Edinburgh-based 123 Accountancy not only provide all the financial services any small or medium business requires each month, but also offer invaluable advice via their extremely user-friendly and useful website information forum.
“There has never been a time when good accountancy in Edinburgh, and indeed the rest of the UK, has been so vital for the economy as well as the ongoing success of new and existing businesses,” says Angela Young of 123.
Mind the pennies, adds Angela and, well everyone knows the rest, but the point is 123 Accountancy know only too well that the secret to implementing good financial management is to focus on small income and expenses.
“When any business delivers the goods or provides a service,” says Angela, “they will want to get paid. Fairly straightforward, certainly. However getting customers to pay can sometimes be both tricky and frustrating; business owners can be heard screaming ‘just pay the invoice for pity’s sake!’ or words to that effect.”
One way for businesses to manage the situation, says chartered accountants in Edinburgh, is by making sure customers are aware of their payment terms. Although these may be included in their terms of business, it can be useful to email a customer with a summary including cost or rate, days to pay and bank details.
Have a system in place that highlights who owes money to you, how much together with the number of debtor days (days that invoices are late). This can be on an Excel spreadsheet or an accounting software package for small businesses. You can then focus on the late payers. Where certain customers have a habit of paying late, it may be useful to send them a notification prior to sending an invoice through and letting them know it is on its way along with the required payment date.
“Another Edinburgh accountancy tactic that works quite well for a lot of businesses,” says Angela, “is to offer a discount to customers who pay promptly e.g. 10 percent discount if the invoice is paid within 14 days. Most of us like a discount and it can motivate a customer to act quickly, both to secure the discount and to avoid an additional charge. If cash flow is an issue for your businesses because of chronic late-payers then a tactic like this may bring in money promptly and could make a considerable difference.”
About 123 Accountancy:
123 Accountancy comprises a group of highly-experienced chartered accountants, with collective flair for innovation and the championing of new ideas for modern SMEs. Freelancers, SME’s, sole traders, limited companies, partnerships and contractors all make use of 123 Accountancy.
123 Accountancy provide assistance in – year end accounts, tax, payroll, book keeping, VAT, and many other financial requirements.
Their proudest offering is their trademark three-step approach to accountancy, which has already simplified the entire accounts process for hundreds of UK businesses in an ever-growing client-base.
Tel: 0808 100 8123