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Lower overheads mean more profit

Cost efficiencies that dreams are made of!

Wednesday 30 September, 2015

As a business owner one of the most important factors in owning and running your business will be your overheads.

More than often overheads and ongoing expenditure are not considered in too much detail until the preparation of the final year accounts. However, would it not be beneficial to know what expenditure you are incurring on a daily basis?

Cloud accounting allows you to monitor through the reports it produces the expenditure you are incurring. With this information you will be fully aware of what expenses you have paid and are waiting payment. This information may require you to make an immediate decision instead of making a decision in the future once the purchases have impacted upon your profits.

For example, from the reports you could realise that postage has increased significantly and as a result you could opt to use email as an alternative or source alternative couriers. You may notice that the cost of supplies have increased and this could prompt you into seeking alternative suppliers.

Imagine if you were preparing your accounts annually, and it was not until you were suffering cash flow difficulties or you received the final accounts from your accountant that you discovered you were continuing to pay for a service you no longer received i.e. mobile phone, finance or insurance.

How many of us have accidentally discovered that we have been overcharged for an item or that two direct debits are being taken from our bank account - suffering a minor loss from our personal bank account may only be inconvenient. The consequences of incorrect invoices being paid by your business could be huge. Not only may you have insufficient funds to pay your creditors you may be forced to raise finance at an additional cost to the business.

The use of cloud accounting (such as Xero) will identify any incorrect sums being debited from your bank account, as your bank account statements are fed directly into the software and the bank reconciliation (matching of invoices and bank transactions) can therefore be managed on a daily basis. As a result any issues arising can be identified and resolved as a matter of urgency, preventing the overpayment of supplies and services.

Unlike traditional desktop accounting products there is a monthly fee for Xero which remains the same and does not increase when adding additional users or machines. There is no need to purchase updates as this is dealt with by Xero at no additional cost to you. Most importantly you will never lose time or need the assistance of an IT expert to install Xero updates as they are all dealt with in the Cloud and not at the PC saving you money and time.

At Tax Matters we believe that a cloud accounting account is so beneficial to your business that we offer book keeping packages that will allow you to receive the software FREE. In addition we also offer a package that includes FREE preparation of your annual accounts. If you would like to discuss the opportunity of receiving a 30 DAY FREE TRIAL and support then contact info@taxmatters.tax