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During the isolation due to the coronavirus, most businesses have found themselves in difficult circumstances and unprecedented situations, therefore they needed support from outside. Some of them have been in a better situation and have tried to maintain that level, while some other businesses have seen new opportunities and now need additional investments to realize these opportunities. No matter what situation you are in, in the short or long term it is important to consider the value of proper accounting for your business, as the language of business is numbers and accounting is first for the business and then for the tax administration.
We're starting with three questions that you as a business owner should ask yourself:
- When you are talking with clients about new projects, how will you assure them that your business is stable and that you can complete the work on time and that you can convey their development ambitions?
- How will you ensure the staff that you have the capacity to develop the business?
- Or your suppliers, that you are able to fulfill your obligations to them on time?
- You have a new business idea, how will you ensure the banks/investors that they trust you in providing loans that will support the development of your idea?
It is not enough to declare "it is done" but you must communicate with the language of numbers, where genuine accounting gives you confidence in negotiations with different parties.
We are now predicted to face a second wave of the coronavirus and you need to take steps to protect your business from the negative impacts due to COVID-19. You can consider reducing some expenses, you can reschedule your tax and loan payments, you can agree to defer payment deadlines to suppliers, work with shift staff (someone from home and some in the office, half-time). but one thing you should not do – cut back on accounting services because you have no way to generate accurate and timely information, data that will enable you to get out of this created situation with as little pain as possible.
The sales report is an important piece of data for the owner, but without a system you cannot compare sales between the current period and previous ones to understand how much your business has been affected by the coronavirus situation. Also, sales information without the portion of the cost of goods/services sold gives you inaccurate gross profit information. How will you generate information on operational expenses and identify in which areas to make cost reductions without harming the health of the business.
You may have funds in the bank account, but without an overview of accounts payable, credit obligations or tax obligations, that information represents only an illusion that the business is doing well.
Maybe you think that by using excel you can succeed, or that you only need to prepare the book of sale and purchase (request from the tax administration), you are very wrong. You will understand the cost of this approach later. When the notes grow and the complexity expands, then the information is difficult to track in excel, not to mention the mandatory reporting according to IFRS for small and medium-sized enterprises.
Why accounting systems and services are essential
Before starting any analysis, make sure you have all the records in the system. The more up-to-date you are with your notes, the more accurate your information is and it helps you track trends, make the right forecasts, track cash flow and react immediately when needed.
How can Melita&Partner help you to be complete?
As a group of certified accountants with extensive experience in the private sector and other organizations we know what the requirements are and are equipped with knowledge of local and international accounting standards. We have the experience to handle the details, but above all, we are also mentors who take care of our clients. After cleaning the data and updating it to give you real reporting, we work with clients to understand their numbers and make good business decisions, thus feeling financially secure.
Accounting with us is not just reactive services. We do not stop only with the registration of expenses. Together with you we will look ahead, helping you to prepare budgets, forecasts and cash flow plan. But the first thing is to put the papers in order and from this point build a stable foundation for the future.
The year 2020 is undoubtedly a defining moment for the future of the business and you have the opportunity now to make a decision, put the papers in order, benefiting from qualitative accounting services.
