How to successfully manage the accounts for your small services businesses
A well-managed service-based business speaks volumes to its customers. Why? You provide your expertise and skills to your customers and clients, and if you run a tight ship you’ll earn more trust from them.
A small service business can include everything from hairdressers, mechanics, consultants, writers, IT professionals, drivers or private tutors. It is defined as a business providing a service rather than a manufactured product.
Having a well-organised set of books provides many benefits to your small services business. Here’s a round-up of the best approach to take:
Accurately define your costs
Time is money in your case! How much does it cost you to provide someone with a cut and blow dry or to teach piano lessons for two hours? Being able to see your running costs, as well as factoring in your time, will allow to you price correctly.
Accounting software will allow to you see what you spend on rent, utilities, travel, materials and telecoms which provides a baseline for pricing.
Is one of the services you offer providing a good return? You may see that a certain service or client taking up more time than you thought.
By matching up invoices to time spent you can see what you should and shouldn’t offer in the future. This can help you rework your offering to make better use of your time.
Manufacturing and services business both incur costs for supplies and can make savings by managing them well. With an organised accounts system you can easily see what you are spending money on.
For example, as a hairdresser you are repeatedly ordering a haircare range that your stylists love, so why not see if you can take advantage of bulk order discounts? You’ll be able to ensure a steady supply for your salon, and save money too.
We’ve talked about time being important, and by making the best use of your time you can be more competitive. Take advantage of accounts reports to plan your working days and months, predicting when you are likely to be busy and when you need to do some business development.
Keep your team happy
When running a small business your team are everything, they have an intimate knowledge of what you do and these ‘early adopters’ can help you grow into a successful venture.
So how can accounts keep them happy? Offering an organised approach to payroll will give your staff security and peace of mind, as well as freeing up your time for the real work. Use a system like Sage One Payroll to automatically calculate for PAYE and run salary payments.
Auto-enrolment is also around the corner for many smaller businesses, are you ready to implement a pension scheme? Sage One Payroll lets you know when you need to offer a pension guides you on how to set it up.
Run your services business with Sage One Accounting and Payroll
Record cash-based transactions
If you’re running a customer-facing business you may have a lot of cash transactions to record.
For example, if you’re a taxi driver, at the end of the day you’ll need to record all your fares quickly, because you’ll be straight back in your cab the following morning. Sage One allows to you import or enter cash deposits without having to laboriously match up transactions.
Connect to your bank account
Save time checking separate systems and connect your bank account to Sage One. You’ll be able to see what you’ve deposited, when you’ve been paid and what your cash flow is like.
Manage quotes and invoices
Aid your client’s decision making by quickly creating quotes that can be sent by email.
Sage One allows to you to create professional templates for quotes, so you can easily set up an estimate for a customer. You can even create a series of templates, making it simple to quote for common or recurring work.
You can then track those quotes and turn them into invoices, which can again be sent to your customer. Each invoice can include a payment button; reducing time spent chasing or reminding customers about deadlines.
Get paid on time
Sage One will flag up nearly due or overdue invoices in one place, to help you get paid. You can also easily collaborate with your accountant so they can use their experience to chase late payers, and add a Pay Now button on your invoices and allow payments online and over the phone.
Sage Payroll can help you get into a routine with your staff, allowing you enter their details once and pay them on time each month, week or fortnight. All the calculations for net pay, tax, NI, student loan contributions and pension payments are taken care of at the click of a button. You can easily manage bonuses and pro-rata hours too.
Having a good view of your payroll costs is vital for a service business, as this is likely to be your largest overhead.
Have access to all your supplier information in Sage Page, integrated with every other part of your bookkeeping process. Find their contact details, see previous receipts and run reports to predict future costs.
Never miss a payment too; Sage One allows you to pay suppliers and easily see if you’ve missed a payment.
Accessible from the cloud
No two days are the same as a small business owner, so you may not always be in the office every day. This isn’t a problem for Sage One, you can access it from the cloud on a desktop computer, mobile or tablet. It is completely secure and designed to work on any device.