As business owners, we have so many demands on our time and delegating is an effective way of freeing up your time to focus on more critical activities.
We all know that our business’ finances are the lifeblood of our business; if we fail to manage our cash flow effectively, then quite soon we do not have a business.
So, just how far can and should you delegate your business finances?
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Book keeping is the low hanging fruit
If you are spending your time inputting receipts into an accounting package, then this is an activity to consider delegating to a financially-minded staff member or outsourcing.
Bookkeeping is a reasonably low-value activity for a business owners’ time. If you find a trustworthy and accurate person to do it for you, then there is little risk in outsourcing this activity.
It is a cost-effective and straightforward activity to delegate.
Automate through a great bookkeeping package
There are numerous bookkeeping packages that you can pay for monthly or annually, which will automatically pull transactions from all your business bank accounts and cards, and make the bookkeeping process very simple for you. These are relatively inexpensive and will reduce the amount of fees you need to pay a bookkeeper as the package will automate a lot of the process.
Great accountants should pay for themselves
When it comes to producing your VAT returns, your corporation tax return and your financial statements, consider the use of a trusted accountancy firm. A good partnership should save you more money than the fees they charge you, as they will guide you on tax savings, how to pay yourself, and other financial matters.
They will also guide you on matters such as the amount you need to put aside for VAT and corporation tax. Do not make the mistake of spending this money because you will have a severe cash flow issue when you are due to pay the government.
Choose an accountancy firm that has a good reputation in your community.
Select a staff member to lead collections activities
If you give your customers credit or operate on a subscription basis, then you will need a staff member to lead on your collections process if a customer does not pay on time. The staff member should be removed from the day-to-day relationship with the customer and will need a firm, but empathetic personality.
Always know your financial position
While delegating aspects of your financial processes is helpful, always remember that the ultimate accountability for your business’ finances lies with you. You need to understand your financial position to make sound decisions on aspects such as pricing, expanding the business, hiring and many other choices.
Fully delegating your finances also puts you at risk of fraud. Make sure you have checks and balances in place to review the financial activities that you have delegated. These checks could include:
- Doing background checks on any staff members who will handle financial information.
- Agreeing what level of financial decision your staff must consult you on; for example, what level of expenditure you must sign off.
- Seeing a daily, or a weekly picture of sales.
- Seeing your cash flow position weekly.
- Getting a monthly update on your profits.
Select the right payment solutions provider
You’ll also need a payment solutions provider who can take the stress out of collecting money from your customers, and who will pay you quickly to assist your cash flow.
Make sure you select a provider who offers a range of payment solutions for your needs; from countertop card machines to mobile card machines, to an eCommerce Payment Gateway.
Look for a company that offers faster processing of the transactions and excellent fraud protection, so that you can be confident that you will receive your money fast, and that you are collecting legitimate payments.
For example, payments experts UTP Group offer same day funding, meaning that your payments will be in your account as quickly as within an hour. They partner with BarclayCard, which is an established bank, so you benefit from an excellent level of fraud protection, and on top of that, they conduct a unique level of additional checks each day to protect you and your customers.
Conclusion: outsource the admin and retain the strategic picture
The starting point for any delegation decisions in your business is asking the question ‘what is the highest and best use of my time?’
With business finances, your focus should be on making decisions with financial data, not checking the individual debits and credits. It may take a little while to get to this stage if you are starting your business and you have no staff and no budget for outsourcing, but this is where you should aim to get to in time.
Pick the right partners to support you, whether that be a bookkeeper, an accountant or a payment solutions provider; they will all help to free up your time and provide you with the financial data that will enable you to make the right decisions for your business.
