Back to School, Back to Business: Is It Time to Sort Out Your Business Finances?
The uniforms have been bought.
The school bags have somehow already made their way onto the floor.
And after six weeks of trying to run a business while simultaneously hearing “Muuuuum…” approximately 847 times a day, September has arrived.
The kids are back at school.
And for a lot of business owners, that means one thing:
It’s finally time to get properly back to business.
September has always felt a little bit like a second January.
The summer holidays are over. Routines are returning. There are a few solid months left before Christmas starts taking over everyone's calendars.
So, before you throw yourself straight back into doing all the things, there’s something much more useful you could do first.
Look at your numbers.
Not just your bank balance.
Your actual business numbers.
Because if your business has grown but your understanding of its finances hasn't grown with it, now is a very good time to fix that.
1. Do you actually know how profitable your business is?
Let’s start with the big one.
Your turnover is not your profit.
And your profit is not necessarily the amount of cash you have available
to spend.
A business can be turning over £200,000 a year and still have serious cash flow problems.
Equally, you can have a healthy-looking bank balance today while quietly having VAT, Corporation Tax, PAYE, supplier bills and other commitments waiting around the corner.
So ask yourself:
Do I actually know how much profit my business is making?
Not roughly.
Not based on what is sitting in the bank.
Not “I think we're doing alright.”
Actually know.
If the answer is no, your bookkeeping and financial reporting should be giving you far more visibility than they currently are.
2. What has your cash flow looked like over the last few months?
Summer can do strange things to business cash flow.
Clients go away.
Customers disappear on holiday.
Invoices take longer to be approved.
Staff take annual leave.
And depending on your industry, revenue might suddenly increase or fall off a cliff.
Now that September is here, look at what actually happened.
How much money came in?
How much went out?
Are customers paying you on time?
Have your costs increased?
Are there particular months where cash gets tight?
And, importantly:
What does the next three to six months look like?
Cash flow problems are considerably easier to deal with when you can see them coming.
3. Are you still pricing for the business you have now?
This one catches growing businesses out constantly.
You set your prices when the business was smaller.
Then you hired people.
Added software.
Took on premises.
Started outsourcing.
Your insurance increased.
Your suppliers increased their prices.
Your own experience increased.
Your service got better.
But your prices?
They've barely moved.
Your pricing needs to reflect the business you are running today, not the business you started three years ago.
And this isn't simply about putting every price up by 10%.
You need to understand your margins, your costs and what each product or service actually contributes to the business.
More sales don't automatically create more profit.
Sometimes they just create more work.
4. Is your bookkeeping helping you run the business?
There is a massive difference between:
“My bookkeeping is up to date.”
and
“My bookkeeping gives me the information I need to run my business.”
Yes, your records need to be accurate.
Yes, your VAT returns need completing.
Yes, your year-end accounts need filing.
But if your business is turning over £100k, £200k, £300k or more, your financial information should be doing more than keeping HMRC happy.
It should be helping you answer questions.
Can we afford to hire?
Can I increase my drawings or salary?
Which part of the business is actually making money?
Why was profit higher last month?
Why is there less cash in the bank when sales have increased?
Can we afford that investment?
What happens if sales drop by 15%?
That's where good bookkeeping becomes business information.
5. When did you last properly look at your expenses?
I'm not talking about spending three hours cancelling a £9.99 subscription while ignoring £20,000 worth of bigger financial decisions.
Look at the whole picture.
What are you paying for?
What has increased?
What are you barely using?
Which costs generate a return?
Are you duplicating software or services?
Have subscriptions quietly crept upwards?
And are you claiming the legitimate business expenses you're entitled to?
The goal isn't to make your business as cheap as humanly possible.
It's to make sure the money leaving the business is doing something useful.
6. Do you know what's coming before the end of the year?
There are roughly three and a half months between the September school return and the end of December.
That is plenty of time for things to change.
But only if you know what you're trying to change.
What does your current pipeline look like?
What revenue are you forecasting?
What tax liabilities are coming?
Are there large annual bills due?
Do you have enough cash set aside?
Is there capacity to take on more work?
Do you need to recruit?
Do you actually want the business to grow further?
You cannot make good decisions using numbers you haven't looked at yet.
7. When did you last have an actual conversation with your accountant or bookkeeper?
And I don't mean: “Your accounts are ready. Please approve.”
If your business is established and growing, you should be able to have conversations about what is happening inside the business, not just what needs submitting to HMRC.
At A B C S UK, that's why our approach goes beyond simply processing transactions and producing accounts.
We want to know what you're trying to achieve.
We want to understand what's working.
What's not.
Where the money is going.
What the numbers are telling us.
And what you need to think about next.
Because sending you a report without helping you understand what it means isn't particularly useful.
Your business might have outgrown your accountant
This is something business owners don't always realise straight away.
The accountant or bookkeeper who was absolutely fine when you were turning over £30,000 might not be the right support when you're turning over £150,000.
That doesn't necessarily mean they've done anything wrong.
Your business has simply changed.
At a certain point, knowing that everything has been filed isn't enough.
You need visibility.
You need conversations.
You need someone to spot things.
You need to understand the numbers before you're making decisions, rather than finding out what happened nine months later when the annual accounts arrive.
And if you're currently making decisions based primarily on how much money is sitting in your bank account, that's probably a sign you've reached that point.
Consider this your September business reset
You don't need a new pencil case.
You don't need colour-coded highlighters.
And there will be no homework.
But I do want you to answer these seven questions:
Do I know how profitable my business actually is?
Do I understand my cash flow?
Are my prices still right?
Is my bookkeeping giving me useful information?
Are my costs under control?
Do I know what's financially coming next?
Am I getting enough support from my accountant or bookkeeper?
If you answered no to more of those than you'd like to admit, that's your September starting point.
And please don't wait until January to make it a New Year's resolution.
Ready for better financial visibility?
A B C S UK works with established UK business owners who have reached the point where simply having a bookkeeper or accountant isn't enough anymore.
If your business is growing, you're turning over £100k+ and you want to understand your numbers rather than just receive them, we should probably have a conversation.
No jargon.
No making you feel stupid for asking questions.
And no disappearing for 11 months before popping up when something needs filing.
Just proactive bookkeeping, accountancy and business support designed around the business you're actually trying to build.
Because your business deserves better.
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