Missing payroll can be a nightmare for any business owner. Not only do you have to worry about the financial repercussions of not paying your employees, but you may also have to deal with legal consequences, too. However, if you find yourself in this situation, there’s no need to spiral because there are a few things you can do to mitigate the damage.
There are a few common reasons why businesses miss payroll. The most common reason is simply that the business doesn’t have enough money to pay their employees this month. This can be due to a slow period or unexpected expenses, or due to poor budgeting.
Businesses also sometimes miss payroll because of a mistake somewhere in the payroll process. This could be due to using outdated software, an error in calculating hours worked, miscalculating taxes, or failing to properly process payroll deductions.
Whatever the reason for missing payroll, it’s important to take action immediately. The longer you wait, the more damage you’ll do to your employees and your business.
If you’re missing payroll because you don’t have enough money, then you need to take a close look at your budget. See where you can make cuts in other areas so that you can free up some cash to cover payroll. You may also need to take out a loan or line of credit to cover the shortfall.
You should also take a close look at your budget to see where you can make changes so that you don’t find yourself in this situation again. Ideally, you should have a cash reserve to act as a buffer so that even when an unexpected expense occurs or you have a quiet month, you still have enough funds available to pay your staff on time.
Cash Flow Forecasting
Another tool that can help you avoid missing payroll is cash flow forecasting. This involves estimating how much money will be coming into your business and when, and then using that information to plan your spending. This can help you identify potential problem areas so that you can take steps to avoid them.
If you’ve missed payroll because of a mistake in the process, then you need to take steps to correct the mistake and prevent it from happening again. Being paid late or incorrectly angers and frustrates employees, so it’s important to take action to make sure that this doesn’t become a regular occurrence. Otherwise, you risk losing good employees.
If you’re using out-of-date software, consider upgrading to something more modern that will automate some of the payroll process and help you to avoid mistakes. If you’re miscalculating hours worked, consider using time tracking software so that you have a more accurate record of employee hours.
It’s also worth considering outsourcing payroll to an accountant who can handle the process for you. This will help you to avoid the hassle and stress of dealing with payroll yourself, which can be a huge help when you’re busy with other aspects of running your business.
Whatever the reason for missing payroll, it’s important to communicate with your employees. They need to know what’s going on and when they can expect to be paid. Be honest with them about the situation and keep them updated on what’s happening.
If you’re having financial difficulties, let them know and explain what steps you’re taking to rectify the situation. In the wake of a payroll error, transparency is key to maintaining employee trust.
Missing payroll can cause a lot of damage to your business and employees, but there are steps you can take to mitigate the damage. Better budgeting, cash flow forecasting, and payroll mistakes can help you avoid missing payroll in the future. Communicating with employees is also key during these difficult times.
If you’re really struggling with payroll, hiring an accountant to advise you and manage your payroll is the easiest and most effective way to ensure that your business can stay afloat. In addition to putting efficient payroll systems in place, they will also help you to budget and forecast your cash flow properly to ensure that you always have enough money to meet your financial obligations.
Book a free consultation here.
A lean business model is an effective way to ensure success and longevity. Given the current state of the economy and business landscape, it is more important now than ever to keep your business lean.
A lean business is one that limits waste, reduces costs and maximises efficiency. This saves not only money, but time, too. It also makes it easier to adapt and pivot when necessary.
Let’s look at how you can keep your business lean for financial success in 2023.
1. Eliminate Waste
The first step to keeping your business lean is to evaluate current practices and look for areas of waste or inefficiency. This includes everything from physical products to process and procedures. Make sure you are only using the necessary resources for your operations, and look for opportunities to streamline operations, such as by automating processes.
2. Automate What You Can
Automation can help reduce labour costs and free up resources for other areas of the business. You can automate everything from payroll to customer service, invoices and even marketing activities. This not only reduces costs, but improves the customer experience and workflow.
3. Outsourcing Over Hiring
One of the most effective ways to keep your business lean is to outsource certain tasks rather than hiring new employees. This eliminates the costs associated with recruitment, training and onboarding new staff, as well as providing you with access to experienced professionals who can deliver high-quality results.
You also won’t have to worry about HR management such as pay, benefits or vacation time. Outsourcing can be a great way to remain competitive in the market without breaking the bank. It keeps your business structure agile and allows you to focus on core tasks while granting you greater flexibility and scalability.
4. Be Frugal – Not Cheap
There’s a big difference between being frugal and being cheap.
Being frugal means finding ways to reduce costs without sacrificing quality, while being cheap means compromising on quality in order to save money.
One will benefit your bottom line, while the other can damage your reputation.
When looking for ways to save money, be sure to consider long-term impacts, not just short-term savings. Remember that investing in quality products and services can help save money in the long run by reducing maintenance costs and increasing efficiency.
5. Learn How to Say “No”
“No” is the most powerful word in business, and it’s important to learn how to say it.
Saying no can help you stay on track with your goals and objectives, prevent overspending and help you stay focused on what’s important.
It can also help you establish boundaries with partners and vendors, ensuring that you are only partnering with those who can deliver the results you need without compromising on quality.
It also means that you don’t get side-tracked by projects, requests or ideas that don’t align with your goals or add value to your business.
By learning how to say “no” and sticking to it, you can remain lean and focused on what’s truly important.
6. Know Where Your Profits are Coming From
We know, we know – you’ve probably heard the term “know your numbers” a thousand times by now. But it’s true. Knowing where your profits are coming from is key to understanding what works and what doesn’t in your business.
Look at your sales numbers and customer data to identify which products or services are your most (and least) profitable. This will help you focus on what works and eliminate what doesn’t.
By understanding which products and services are the most profitable, you can then focus on those areas and invest in them – while cutting back on products or services that don’t generate enough revenue.
By following these tips, you can ensure that your business remains lean and competitive in 2023.
Automate wherever you can, outsource any tasks that are not core to your operations, invest in quality without being cheap, learn how to say “no” and always know where your profits are coming from.
By doing so, you can keep your business lean and ensure that you remain profitable in the years ahead.
The challenge of keeping a business lean can be daunting, but with the right approach and strategy, it can be done. The key is to stay focused, remain strategic and have a long-term vision for success. The rewards are certainly worth it.
Book a free consultation here.
As a small business owner, you will eventually want to scale up.
Scaling your business means growing it to a point where it can support more customers or clients, more employees, and ultimately make revenue.
However, attempting to scale too soon can spell disaster. Trying to scale before your business is ready can cause a loss of customers and employees, as well as serious financial problems.
So how do you know when it’s time to scale?
We’ve listed five key ways to tell whether or not you’re ready to take your business to the next level.
1 – Examine Your Current Business Model
Some business models are more scalable than others. What works for your business while you’re still relatively small might not work when you’re trying to accommodate more employees or satisfy a greater level of demand.
Take a close look at your current business model and ask yourself whether or not it can be adapted to a larger business. If not, you’ll need to come up with a new model that can support your growth.
Generally speaking, businesses that are more scalable have lower overheads and can generate a higher return on investment. The leaner and less labour-intensive your business is, the easier it will be to scale.
2 – Look at Your Customer Base
Another way to tell if you’re ready to scale is by looking at your customer base. Do you have a large enough customer base to support more employees and increased demand?
If your answer is no, then you need to focus on building up your customer base before you try to scale. A business can only grow as fast as its customer base.
It’s also important to consider whether there is the potential for your customer base to grow significantly. If you’re only catering to a small niche market, it might not be possible to scale your business without branching out into new markets.
3 – Make Sure You Have the Right Team in Place
A key part of being ready to scale is having the right team in place. As your business grows, you’ll need more employees to help with the increased workload.
But it’s not just about having more employees. It’s also about having the right employees. Make sure you have a team of people who are passionate about your business and who want to see it succeed.
You’ll also need to ensure that your team is equipped to handle a larger workload. Make sure you have systems and processes in place to help them work more efficiently.
And finally, you need to be sure that your team is able to work together effectively. Strong communication and collaboration are essential for any team, but they become even more important when you’re trying to scale.
4 – Assess Your Financial Situation
Scaling your business will require a significant investment of time and money. Before you take the plunge, you need to assess your financial situation to make sure you can afford it.
Take a close look at your revenue and expenses to see if you have the cash flow to support more employees and increased demand. You might need to invest in new equipment or make other changes to your infrastructure.
All of these things cost money, and just because your business is turning a profit doesn’t necessarily mean that you have the cash available to make these investments.
It’s also important to consider how you will finance your growth. Do you have the savings to cover the costs? Or will you need to take out a loan?
5 – Carefully Weigh Up the Pros and Cons
Finally, it’s important to have a realistic understanding of the pros and cons of scaling your business.
Scaling can be a great way to accelerate the growth of your business, but it’s not without its risks. Make sure you carefully weigh up the pros and cons before you make a decision.
The bottom line is that there is no one-size-fits-all answer to the question of whether or not you should scale your business. It depends on your specific situation and goals. But if you’re thoughtful and strategic about it, scaling can be a great way to take your business to the next level.
Scaling your business is a big decision. There’s no right or wrong answer, but there are some things you need to consider before you make a decision. It also may be the case that you’re not ready to scale right now, but that doesn’t mean you never will be.
Book a free consultation here, to discuss your needs and see whether it’s the right time to scale your business.
It seems like everyday we hear about another industry being threatened by the advancements in technology, but is accounting one of them? Cloud based accounting software certainly has risen in popularity in recent years, but Quickbooks and Xero are no replacement for living, breathing professionals – and here’s why…
Before we dive into the main reasons why accounting software won’t replace traditional accountants, let’s take a moment to think about one of the ways in which it can enhance and improve their services: location freedom. Whilst you may sometimes want to sit down face-to-face with your accountant, using cloud software means that you need not choose a professional based primarily on location. It also allows far greater flexibility and convenience which is certainly conducive to a healthy working relationship.
A Smaller Tax Bill
Granted, accounting software is able to help maintain accurate records and automate calculations for your tax return, but it won’t help you take advantage of the latest lucrative tax breaks and incentives.
Tax regulations change all the time and staying on top of them can feel like a full-time job in itself. A software program might help you get the numbers right on your return, but it won’t spot new opportunities to save a hefty chunk on your bill. Only a living, breathing accountant can do that!
Accounting software takes care of much of the ‘grunt work’: the calculations, the forecasts and so on. What cloud accounting programs can’t do, however, is offer advisory services. A computer simply doesn’t have the business experience, critical thinking ability and financial acumen of a real-life accountant. Software can crunch the numbers, but it can’t offer counsel.
You might think that the covid-19 pandemic had businesses turning increasingly towards AI accountants but in reality, this period of economic hardship has simply underscored the importance of advisory accountants.
Businesses have been forced to navigate significant and sudden changes in law, initiatives, deductions and the shifting economic climate. Accountants have proven invaluable in helping entrepreneurs to navigate these ever-changing waters. The pandemic has brought us into unprecedented economic times and as the world continues to recover, advisory services will become more necessary than ever.
Consequently, these days more and more accountants are focusing on offering advisory services and acting more like business partners than processors. An experienced accountant is able to leverage their experience and acumen to offer valuable advice and insights to their clients. If Quickbooks or Xero could do that, the monthly subscription fee would be significantly higher.
Rather than replacing human accountants, cloud accounting software may even render accounting services more accessible to startups and small businesses. Business owners can use software to handle the grunt work for a smaller fee, leaving more funds to invest in interpreting the numbers. Traditional accountants will not be replaced, but rather their abilities will be enhanced by the advancement of AI.
Cloud accounting software is certainly helping to enhance and transform the work of traditional accountants, but there is no danger of human professionals being eclipsed by technology. Accounting software is a means to an end – and an effective one at that – but not an end in itself. As accounting software is increasingly able to take care of some of the industry’s more menial tasks, the role of accountants will not be eclipsed but will rather shift more towards an advisory one. Accounting software is certainly helpful for business owners, but there is truly no substitute for the shrewd financial insight of a professional accountant.
Book a free consultation here, to discuss your needs and learn how we can help you.
In order to keep your small business running smoothly, it is important to develop healthy financial habits. This means being conscious of how you spend your money and conserving cash wherever possible. In this blog post, we will discuss four healthy financial habits that can help you conserve cash in your small business. Let’s dive into how you can build habits and create a more sustainable small business.
#1 – Set Financial Goals
In order to conserve cash in your small business, you need to get into the habit of regularly setting and updating financial goals. You can do this by thinking about your current financial situation and what changes you would like to make. Consider the following questions before setting a goal:
- What is my current profit margin
- What is my desired profit margin after tax?
- What are my current expenses?
- How many hours per week do I spend on this business?
- What would be the best ways for me to save money or increase revenue?
Once you have answered these questions, it will be easier for you to set realistic goals that conserve cash.
Remember, your goals should be SMART:
S – Specific, M – Measurable, A – Attainable, R – Relevant and T- Timely.
An example of a SMART goal would be: Increase my profit margin from 20% to 30% within 12 months by streamlining operations and reducing costs.
The goal is:
- Specific because it includes how much you want your profit margin to increase.
- Measurable because you can track your progress over time.
- Attainable because it’s not impossible to achieve.
- Relevant because it will help improve your bottom line
- Timely because you have set a deadline for yourself.
When setting financial goals, make sure to keep the SMART acronym in mind.
#2 – Perform an Expense Audit (and Then Plug the Leaks)
In order to conserve cash, it is a good idea to perform an audit of where you spend your money. You can do this by reviewing your bank statements from the past few months and identifying expenses that are not necessary for running your business.
The next step is to cancel any subscriptions or memberships that you no longer need or use. After that, you can try to renegotiate contracts with suppliers or vendors and ask them for a lower rate on their services. You should also make sure that your accounting software is up-to-date so you know where every dollar goes in your business (and what it’s paying for).
Finally, keep track of how much money comes in and out of your business on a monthly basis. This will help you to stay on top of your finances and identify any areas where you need to tighten the belt.
#3 – Automate Your Emergency Fund
One way to conserve cash in your small business is by automating your emergency fund. This means setting up a system where a certain amount of money is automatically transferred from your checking account to your savings account on a regular basis.
This can help you avoid the temptation to spend all of your money and will ensure that you have some funds saved up in case of an emergency.
There are a number of different online banking services that offer this feature, so be sure to do your research and find the best one for you.
When automating your emergency fund, make sure to set up a transfer that is realistic for your budget. You don’t want to put too much stress on yourself or your business by setting the transfer too high.
#4 – Monitor Your Cash Flow DAILY
Monitoring your cash flow on a daily basis is an important habit that can help conserve cash in your small business.
The best way to do this is by setting up an automated system where you receive notifications every day at a certain time of the day when there are new transactions recorded in your accounting software. This will keep track of all expenses and income so that you can quickly see where money is coming from and going to.
Conserving cash is important for any small business owner. The small changes outlined above amount to a big difference to your finances over time, so don’t wait to implement them in your business. Remember the old adage: in three months’ time, you’ll be glad you started today.
Book a free consultation here, to discuss your needs and learn how we can help you.