January 24th, 2020

Cutting Corners – The Quickest Route To Financial Failure

Starting a business is often like trudging through a mire of obstacles, leaving the intrepid few with just enough energy to jump through the hoops laid out in front of them. It’s no surprise then that many would-be entrepreneurs look to cut corners – never advisable, but what is more alarming is that some see accountancy as one of the overheads they can live without.

In the Preston area and beyond the number of start-up businesses is increasing. In the UK there was an increase of 4.6% in 2015. However, 50% of businesses fail within the first 12 months. To avoid such failure it is absolutely crucial that business owners understand at least the basics of financial management, even if only for compliance purposes, and any reputable accountancy business can provide that insight.

Accountants throughout Preston offer a range of services depending on the size and needs of the business. Firms such as Red Dot Chartered Accountants offer a consultancy service which can be invaluable to a start-up business. Appointing the advice, experience and mentoring of an accountancy firm such as Red Dot takes that business many steps further than a basic accountancy service can, offering them previously unconsidered options to help develop a safe financial strategy.

Once a business has an accountancy firm in place, pertinent questions should be asked to ensure the business experiences the full benefit of the partnership:

  • How often should we be in touch, and will this be in person or via email/phone?
    Whilst this may sound like an odd question, it is important to set expectations from the offset so that both sides can deliver.
  • What do we, as a business, need to do and provide, and when?
    Agreeing timelines in advance, and having a clear understanding of what is expected, will avoid time-wasting and panic.
  • What role can you play in growing my business?
    Accountants who take an holistic approach don’t just count beans, as mentioned above they evaluate businesses as a whole and can act as mentors, particularly for start-up businesses. Increasingly seen as offering a consultancy service, they have a lot to offer.
  • Can you help me with my cash flow?
    Many businesses expect to create and manage their own cash flow and don’t think to ask for outside help. However the valuable experience of an accountancy firm enables them to provide a robust cash flow. Cash projections are not for the faint hearted.
  • What mistakes am I going to make?
    This may sound odd, but being aware of common pitfalls and errors can give you the armour you need to avoid them. Here at Red Dot we have many examples to share!

If you are embarking on a new venture Red Dot Chartered Accountants would be delighted to talk to you about how we can provide a client-driven service to safely guide you through to year two and beyond. Please contact us on 01772 298300, or by email enquiries@reddotaccoutants.co.uk.