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Our latest Real Business article: What lessons should your business have learned from the Recession?

September 13th, 2010 in Articles

By Catherine Davis

If the travails of the past two years have taught you anything, it’s that cashflow is the lifeblood of your business. Here are four lessons learned.

1. Cashflow is king (even more so than before)

Smart businesses always knew that cashflow is king, but now all business have had to adopt this mantra. Action taken by sensible businesses has ranged from tightening credit terms on sales to negotiating (and lengthening) payment terms to suppliers and re-examining margins. The effective management of cash can be the saviour for your business. Bank reconciliations should ideally be performed daily to give you a snapshot of your cash position each day. Aged debtors should be reviewed preferably weekly and an active credit control policy should be in place to follow up outstanding monies. If you’re too timid or time-poor to chase your debtors, then outsource it. Don’t underestimate the power of good business cash flow.

2. Keeping your books up-to-date is no longer a “nice-to-have”

Gone are the days when business owners visited their accountants once a year to have them produce their out-of date accounts for the previous year. Businesses have realised they need accurate financial data at their fingertips daily. When applying for credit, the majority of lenders now insist on recent management accounts. In any case, is it extremely good practice for any business to have management accounts prepared, analysed and reviewed at least monthly.

3. Constantly review processes

Just because you’ve done something the same way for five or ten years, it doesn’t mean it’s the best way. The recession has forced businesses to look long and hard at each step of their procedures and reassess them for efficiency and effectiveness.

4. Review your controls

Controls? What are they? Well, they’re the often-neglected checks that prevent costly mistakes caused by human error, procedural deficiencies, lack of training or experience, IT failings, or even fraud. Undetected issues can cost your business thousands or even millions each year. Take action now. Put controls in place to make sure your business doesn’t face the unthinkable – insolvency.

Catherine Davis is a chartered accountant and managing director of bookkeeping practice Urban Ledgers.

Xero MD interview with Urban Ledgers

August 26th, 2010 in Urban Ledgers news

This article was published in the Xero blog on 17 August 2010 by Gary Turner (Xero UK Managing Director).  To view the video, either scroll down to the next blog post or click http://blog.xero.com/2010/08/online-is-the-key/.

Online is the key enabler

Last week – with my video camera in tow – I met up with Catherine Davis, managing director of London based firm Urban Ledgers who came on board as a Xero Partner earlier this year. Here’s what she had to say…

Through speaking with Catherine it was obvious that both her personal outlook on the profession and the culture and feel of Urban Ledgers as a firm are yet further examples of progressive, forward thinking that sees nothing but opportunity in the growing modernisation of accountancy, with smart use of new technologies to drive up client service and satisfaction while at the same time squeezing internal costs and inefficiency.

In my role at Xero I concede that I operate in something of an unreality bubble; clearly the majority of UK firms are not funky, progressive or online whereas all the Xero Partners I hang around seem to be. Naturally.

But what I got from talking with Catherine I regularly get from other Xero firms, and this can range from modest ambitions to gently modernise a dusty regional practice, through to big scale and global domination where ambitions are measured in the acquisition of thousands of new clients.

My experience and based upon countless conversations over the year since I joined Xero tells me that making this change work as a practice is not as simple as just introducing Xero – there’s TONS of other hard stuff – but the most consistent denominator they all share is that online is the key enabler.

Urban Ledgers revealed! Our MD is interviewed by Xero….

August 16th, 2010 in Urban Ledgers news

Ever wondered what the difference between a Bookkeeper and Accountant is, but been too embarrassed to ask?

July 19th, 2010 in Articles

Don’t worry – it’s a surprisingly common question.  Here we’ll briefly explain the main differences in plain English.

Bookkeeping is a very task-oriented function, in which the day-to-day financial transactions of your business are routinely and systematically recorded.  These regular transactions include (but are not limited to) entering invoices to be paid, producing and entering invoices to send to your clients, entering bank transactions and performing bank and other reconciliations.

Accountants deal with the bigger picture.  They can help you choose the best accounting system to use, design the overall structure for reporting your financial information and perform the decision making around the financial entries posted by the bookkeeper.  Accountants are trained to analyse and interpret financial reports and are in a good position to forewarn you of any potential issues or upcoming cashflow problems.  They can also recognise process deficiencies and implement controls within your accounts function.

Working together, a Bookkeeper and Accountant make a very powerful team.  Your financial data is kept up-to-date and accurate, plus you have the benefit of understanding exactly what your numbers mean and where your business is heading financially. We strongly believe that timely, meaningful financial reporting and analysis is imperative in the current climate and for the future success of your business.  We have a funny feeling you may agree.

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