2022 has absolutely flown by and like many businesses, we’ve started looking ahead and planning for 2023.
As we’re currently busy preparing for 2023, we thought now would be the perfect time to reflect on some accounting habits you can leave in 2022!
Trust us, ditching the bad accounting habits now will help you save time and ultimately money in the new year – and who doesn’t want that?
Not keeping track of your KPIs
We’ll admit it can sometimes be easy to lose focus of where you are going and without relevant KPIs tailored to your business how do you know if you are on the right track and doing well. Or if you are getting lost and heading blindly towards disaster. The start of any new year is a good time to plan refresh, ensure you understand and have updated your key business drivers. Leave the accounting habits of not keeping track or even setting KPI’s in the first place, firmly in 2022.
If your KPI’s are up to date and you feel they’re relevant – you’re more likely to keep an eye on them as the year progresses. You don’t have to stick to financial KPIs, you should also set non-financial KPIs, such as customer retention and employee satisfaction.
Not forecasting
Accounting habits that you really shouldn’t have brought into 2022 are not doing a forecast at all or making a wildly inaccurate forecast. Having a clear cash flow forecast at the start of the year will help you make faster decisions, give you clarity, help you budget and anticipate when and where to invest any surplus. If you fail to forecast and look at your budget, you’ll struggle to make timely and informed decisions next year.
A forecast is a plan that outlines how much cash you’re likely to have each month. You can use that pre-cited data to map out important business decisions like hiring.
It’s something you can revisit and adjust over the year and it’s especially important if you’re preparing for investment. Investors expect to see a forecast.
Paper receipts – Paper anything really
Gone are the days of hoarding paper receipts when recording expenses – there’s an app for that!
We can’t stress this enough, please move away from using paper receipts. Take a picture of it and upload it to your app. Leave the accounting habits of holding on to all of your receipts firmly in the past.
Moving away from paper in general is a good move for business owners. Not only is it great for the planet, but you could save money on the costs of office stationery and printing supplies too.
Not doing any tax planning
Tax is a complex area, but that doesn’t mean you can neglect it! You really aren’t doing yourself any favours by not having a short or medium term tax plan for your personal and business taxes. Burying your head in the sand will most likely expose you to a few surprises in terms of liabilities, legal obligations and wasted time.
It’ll also cost your business in the long run if you choose to stay in the dark about potential tax reliefs, planning tips and incentives. So, consider working with an expert to properly establish the tax advice you need.
Not working with an accountant
If you’re trying to do it all yourself and it’s getting a bit too much, it’s maybe time to work with an accountant! We can help free up so much time and, let’s face it, as a business owner that’s something you’re stretched for!
Feel free to get in touch for a chat to see how we could support you in 2023.
