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How to manage accounts when dealing with multiple businesses

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Dealing with multiple businesses? You'll want to stay on top of your accounts

Are you managing multiple businesses and need help when it comes to dealing with your finances and accounts?

At one end of the scale, you may have a large business that has acquired smaller companies to fill the gaps in your operation. Perhaps you want to set up an incubator where startups can thrive.

Or maybe you’re a sole trader looking for more of a portfolio career – offering childminding during the week and wedding photography at the weekends.

Whatever the nature of your different companies, there are some key factors in running the accounts for multiple businesses and clients successfully.

Keeping cash flow steady

Say you run two businesses – the main one is a seaside holiday rental business that is fully booked during the spring and summer; the secondary one has you making coastal-themed craft products for gift shops over the winter.

The latter gives you some protection from the seasonal nature of your main business. You can also protect yourself to some extent by asking for deposits up front when people book their holidays throughout the year.

Picture the bakery owner who enjoys steady trade throughout the year and who runs cookery workshops on the side. What would happen if there was flooding in the shop and they had to rely on the income from the secondary business?

Cash flow forecasts are really important, particularly if you have one main business that provides most of your income and several smaller businesses around it.

They also help you answer those “what if” questions so you can take care to always have cash in the bank (and get motivation to chase those late payers).

Spreading the overheads

You may have four businesses but that doesn’t mean you need four IT consultants, four marketing agencies and four offices. Having multiple businesses could mean your average overheads are marginally lower than for the single business owner.

You can also use the same accounting software across the different businesses, giving users individual logins for their particular company accounts. This helps with confidentiality too; you need to keep a close eye on everything but you might prefer your individual teams to stay focused on their own area.

You may find, for example, that your bookkeepers weren’t at full capacity on your main business and can take on a bigger workload, applying their expertise across the different organisations and helping you spot patterns where systems and processes could be improved, plus opportunities for growth.

Automate as many processes as possible

Some business owners focus on getting everything right in one business and then replicating this across the sister companies. You need to be confident that your sales processes are as smooth as possible so you know there is nothing stopping the money coming in.

You also want to free up time for your employees to help you develop the business. If your time is spread more thinly than before, you are going to need to give them autonomy and let them show initiative, not take up their time with manual processes.

Some of the accounting processes you could automate:

  • Creating quotes and invoices and emailing them automatically to your clients
  • Generating, submitting and paying your VAT returns
  • Calculating differences in currencies when trading overseas
  • Scheduling reports, so you can get a regular snapshot of all your businesses and compare year-on-year growth

Sometimes it’s about trial and error until you develop watertight processes that really work for your main businesses, before introducing them to the other organisations.

Listen to what your teams tell you – do they understand the process, do your customers?

Use technology to your advantage

When you’re managing the accounts for multiple businesses and clients, there are many digital tools that can make the process much easier and more efficient.

For example, using the cloud. Because the accounts are online, you and your teams can access and update the information from anywhere in the world, at any time. As long as you have an internet connection, you can log into the accounts for any one of your businesses.

This can be great for the business owner who travels frequently and may want to double check the cash flow forecast for one business while visiting another. It also allows for more flexible working, encouraging loyalty among your bookkeepers and helping you retain good staff.

When your accounts are spread across multiple businesses, using a cloud-based accounts system means your teams will always be using the latest version of the accounting software and will be up to date without having to spend time upgrading systems when new versions are released.

The ease of online payments can also help take your businesses to the next level. Customers can complete transactions quickly and securely, giving you lots of data about their behaviour, which you can use to help shape your business growth.

Accounts checklist for multiple businesses

  • Do you check the cash flow forecast regularly, with scheduled reports?
  • Do you look for opportunities to spread your overheads across the different businesses?
  • Do you keep on top of late payments and chase people early?
  • Have you streamlined processes such as online payments?
  • Are you automating as many processes as possible – from creating invoices to paying your VAT return?
  • Are you using all the digital tools at your disposal, for example cloud-based working and managing payroll?

10 things to look for in small business accounting software

Using the right technology can give you the time and space to make your business a success. This guide offers 10 points to consider when looking for the right accounting software for your company.

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