4 Important Accounting Tips for Businesses in 2022

Although this week’s blog is not at all related to COVID-19 it is fair to say that it was, and in many ways still is the pandemic that changed it all for businesses.  

The reason why we are mentioning COVID in the early stages of this article is to recognise that it has indeed had an impact on businesses over the past 18 months.

So, although everything in today’s blog is relevant with or without a pandemic taking place, we do encourage you to reach out if there’s any accounting or finance questions we can assist with in your business to support your business strategy during and after COVID.

Today however, we are looking at four accounting and finance tips that businesses should consider.

Business Insurance

When it comes to starting a business or growing one, a topic we often get to chat to our clients about is business insurance. 

While it is a known term, there are different types, and it is crucial businesses understand which one is best for them.

Not only that, but each insurance also has different costs so understanding which one a business needs can have a financial impact.

Either way, when it comes to business insurance, we always recommend meeting face to face with a broker who can properly understand your business and ask all the questions they need so they are able to provide the best assessment. Watch our video to learn more.

Succession Planning

Whether you have a current plan in place or considering one in the future, succession planning involves many details, the reason why we recommend a two-year time frame when executing one.

A succession plan simply means having a plan in place for when the owner is ready to sell the business, either internally or externally.

As we said, a succession plan involves many details and there are a number of indications that can help a business understand if they are ready or not to implement the plan.

This includes having clear processes and procedures in place and as public knowledge within the company.

After all, not having these in place could impact the businesses functioning properly and could also impact the price the owner could potentially sell the business for. Watch out video for more details about succession planning.

Business loans

The term business loan may at times have a fairly negative sound to it. And, to be fair, rightfully so. After all, a loan typically means debt and that can be scary for any business.

That said, taking a loan to allow the growth of a business can be extremely positive. After all, if there’s a right plan in place and the loan will indeed be used to execute a growth plan, it could be a great move for a business.

A good way to look at it is, if you can borrow at 2%-3% and your business can get a 9%-10% return, that means you are leaving 6% on the table. So, while debt may be a little intimidating, having a discussion about it and looking at numbers is a great place to start.

When considering a loan, businesses should be looking at the loan rates but also other details such as monthly fees.

The reason for that is, properly understanding the overall cost will allow you to judge which loan is the best for your business. watch our video for more tips.

When is the right time to grow a business?

A common topic within a business and the business stake holder is growth. In fact, as accountants and finance advisors, it is a common topic of discussion with our clients.

Of course, when it comes to growth, there’s not one answer that fits all and there are a number of points business need to consider.

Firstly, businesses need to make sure that they are actually ready for growth.

If a business is a service company it is crucial all the procedure, strategies, and processes are in place. If the business is selling a product, money is typically spent in the time it takes to manufacture and develop the product.

Either way, the first step any company must consider is the reason for their existence. That will no doubt assist in identifying the growth opportunity and direction.

We hope the four tips above have helped.

For any further information regarding accounting or finance advice, contact us at Eventum Consulting. We would be glad to help.