When it comes to doing your accounts, most of you will fall into one of two different camps – on one end of the spectrum are those of you who do all your own accounts and are completely up to date, and on the other are those of you who collect your accounts throughout the year to pass over to your bookkeeper or accountant at the end of the year, and have to wait a few months to find out how the business did in that year, or perhaps you fall somewhere in between these two extremes.
The Real-Time Camp
If you’re in the group whose accounts are fully up to date, you’ll likely be in a position where you can see the state of your business & finances with the click of the button, and know in real time how much revenue you’ve earned, how much profit you’re making, and how much tax you owe. This is a great position to be in – well done! However, if you’re in this camp and are processing all the books yourself, perhaps it’s time to think about whether you are actually the best person to be doing that, and whether that is where your time is best spent. For example, if you could be earning £100 per hour treating patients, you are probably better off finding a bookkeeper who you can pay £25 per hour to do your books for you. Chances are, they’ll be more efficient at the task than you, and you can then maximise your time spent treating patients, in turn bringing more revenue into the practice.
The End-of-Year Panic Camp
If you’re someone who collects your accounts to pass over to your accountant or bookkeeper at the end of the year, it’s really important that you think about what systems and processes you can put in place to get yourself up to date and keep yourself up to date. It’s so important to have visibility of the finances of your practice throughout the year so that you are better equipped to plan for the future. Being up-to-date on the numbers will also significantly reduce the stress that you feel towards the end of the year when it’s time to do your tax return, as you’ll know what to expect and there shouldn’t be any nasty surprises!
The Middle Ground Camp
If you fall somewhere between these two groups, maybe you’re the one who is responsible for doing the books, but you’re often a few months behind because you don’t have the time to do them regularly. If this is the case, we’d recommend that you think about outsourcing some of the process and getting help from a bookkeeper or accountant to help you stay on top of things throughout the year.
For more guidance on this topic, check out our recent Friday Framework video where I speak about how you can utilise dashboards to make the task of managing your numbers easier.