Accounting

5 Accounting Tips For Better Financial Management During Financial Crisis

4 Mins read

COVID 19 has seen companies change their tact from growth to survival in 2020. Businesses are adopting different measures, including laying down staff to survive the hardship brought about by Coronavirus. Failure to adopt new ways of working is leading to the closure of businesses as a result of reduced cash flow. However, companies struggling to survive the epidemic can enjoy a new lease of life by hiring a qualified freelance accountant in Dubai to ensure better management of finances. The accountants are multi-skilled professionals, and you only need to find the right person for the job. The qualities to consider before outsourcing accounting services include:

  • Expertise
  • Personality
  • Advice
  • Cost
  • Availability

Hiring the right accountant for your company will not only help your business survive the pandemic, but it will give your business a platform to grow. Although most companies are focusing on survival tactics at this moment, an accountant can help relook at your financial situation to unlock growth opportunities. Businesses that had adopted sound financial management in the good times are less likely to be pushed to the breaking point by COVID 19 as they have a stable financial outlook. However, it is never too late to start using the services of an accountant.

In this guide, we highlight the important accounting tips every business should implement for better management of finances during the hard times.

5 Accounting Tips To Help Business Navigate The Difficult Times With Better Finances Management

1. Use accounting software

You will likely miss some aspects of your financial situation with manual processes. Receipts can be misplaced, making it difficult to follow up on past situations. Furthermore, accounting software arranges everything neatly giving you a broad scope of your financial data. For example, reviewing your past year’s expenses can be hectic with a manual process as you may have to deal with several files. However, you only need to sort data to find everything you need with accounting software. A business using accounting software can have bigger data ranging back several years for a broader financial analysis. Using the best web-based accounting tools improves the accuracy of your data. It further eliminates paper filing making your business environmentally friendly.

2. Stay on top of your financial deadlines

Some people make a habit of paying their bills when they get a reminder or get the utility services discontinued. Failure to remain up to date on your bills can eat to your savings due to late fees or added interest. You should always stay on top of your deadlines. Knowing in advance when your bills are due gives you adequate time to reorganize your finances, ensuring that you do miss a payment. Furthermore, it gives you time and control to seek alternatives if your business cannot raise the needed amount on time. For example, talking to a creditor before the due date can lead to an extension without attracting a fine.

3. Understand your expenses and income

The best entrepreneurs are always checking their numbers. You should be able to tell the amount on your account, the sales you have made, and the stocks you hold on every working day. Your business is doomed to fail if you do not have a good understanding of your expenses. A top manager should tell the monthly expenses a company incurs on any given month. Make it a habit to track all your receipts, including restaurant bills, utilities, and groceries. You also need to tell all your expected monthly income. If the expenses are more than the income, you should revise the costs to avoid the business running on a negative.

4. Keep business and personal funds separate

Most solo entrepreneurs make a mistake of using a single account for business and personal needs. It is important to separate personal and business funds as it makes it easy to track profitability, reconcile your books, and monitor spending. You are less likely to withdraw money for leisure and other unplanned expenses from a business account if you have separate accounts, ensuring better management of your finances.

5. Create a budget

A budget helps avoid ad hoc spending. It also keeps you focused on your revenue goals by limiting the amount that you can spend on certain things. A budget also gives an insight into the amount of revenue you expect to receive at a given period. You may further need to look at your debts. Ensure that your due debts are included in your budget to have a better understanding of your finances.

Our hand-picked Accounting tools will give you a true and fair view of your current financial position and performance. They also enable you to analyze the past data and generate financial forecasts based on the trends.

As accounting standards are regularly updated. It is essential that the companies also invest in the continuous development and training of their accounting team. Here are the Best Accounting Courses in Dubai which will keep your team up to date with the recent developments. 

We understand hiring a professional accountant can be expensive. Here are the  5 Crucial Reasons why you need a Professional Accountant in the UAE.

Where hiring a professional accountant is a must. Companies can cut their cost by hiring a freelance accountant. Here is why Small Home Business Owners Must Hire A Freelance Accountant in Dubai. Hiring a freelance Accountant also helps you when you are downsizing for better financial management.

Conclusion

The success and growth of your business depend on how well you manage your finances. A professional accountant in Dubai can help you prepare for the bad times by ensuring that you are always on top of your finances. Keep in mind that every financial decision you make will have a significant impact on your business cash flow. An accountant will help bring forth how you are spending money, giving you an idea of areas that you can reduce expenses for a stronger financial position.

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