If you’re running a business, you know that growth isn’t just about increasing sales. It’s about managing growth in a way that is sustainable and sets you up for long term success. A crucial tool for achieving that long term success? An accounting system, a business owners’ ally that ensures every financial aspect of business is accounted for.
SCALING YOUR BUSINESS means expanding your business capacities and capabilities in a sustainable way. This includes increasing revenue without incurring increases in overhead to maintain or improve your margins. Scaling a business comes with a set of challenges, including managing cash flow effectively. Without financial management, periods of expansion can put strain on your financial health. You need to keep a close eye on key financial metrics, something that becomes more complex as a business grows, underscoring the importance of having an accounting system.
An ACCOUNTING SYSTEM is a systematic process of recording, summarizing, and analyzing every financial transaction that occurs within your business. We code these transactions to accounts on the ledger, which are then grouped into 5 categories: assets, liabilities, equity, revenue, and expenses. We also want to factor in dimensions, such as departments, lines of business, or locations. Accounting systems allow you to plan for the future, and can be used to create budgets that reflects a more strategic approach to managing finances, encompassing current operational costs and forecasting future income and expenditures with greater accuracy. This budget can then be used as a roadmap, guiding allocation of resources in a way that aligns with your goals and targets and helping you make proactive decisions regarding hiring, investments, marketing, and other key operational aspects.
An accounting system provides tools to schedule and recognize revenues and expenses over the correct periods through accrual based accounting, enhancing accuracy. Automation saves significant time and effort, allowing you to focus your energy on strategic decisions. In addition, you are able to ensure that transactions are accurately recorded and easily traceable, supporting compliance with accounting standards and tax laws, reducing risk of errors and fraudulent activities and streamlining audits. Accounting systems also simplify invoicing by making them more efficient, from generation and dispatch, to monitoring until payments are secured.
We understand the critical role that accurate financial systems play in business decision making and financial planning, which is why we’ve made it a standard to prioritize a ten day business close for all of our clients, and suggest that you set the same target for your team. Swift turnaround means that you receive financial reports promptly, allowing you to make informed decisions without delay. Setting up an accounting system is a foundational step that can significantly impact efficiency and clarity of financial management. We advise enlisting the services of a professional, such as DCG, to guide you through this process to help establishing chart of accounts, creating comprehensive budgets, closing your books, and minimizing tax liability.
Setting up an accounting system is a foundational step that can significantly improve the efficiency and clarity of your businesses financial management. For a deeper look into these concepts and insight into accrual vs. cash based accounting, invoice management, benefits of accounting systems, and how we can help, watch the full video on our Youtube:
At DeMar Consulting Group (DCG), we specialize in providing top-notch financial services tailored to meet the unique needs of small or large businesses. Our mission is to be your trusted partner on the path to financial success, offering comprehensive solutions that allow you to focus on growing your business while we handle the rest. Visit our Youtube channel or explore our website to learn more.
