If you are starting your own MLM business it’s because you have found your superpower and you want to focus all your energy on growing your business. The reality is that an MLM business demands a lot more of your time purely running the business, than developing your client base and building your dream team. That is why we have developed this guide to accountancy for MLM.
Accountancy for MLM
MLM business management comes with a whole range of different responsibilities. It may not be clear exactly how much when you are getting started. Finance is one area that needs good attention to detail. Good record keeping and maintaining compliance can be a challenge alongside all your other responsibilities. MLM Accountant can take the pressure off your financial management. We have compiled this guide to accountancy for MLM to get you started and we are here to answer any of your questions.
Daily Accountancy for MLM
Check your business bank balance every day. You need to know what your cash position is every day. This is because your cash flow is crucial to the daily running of your business. An unexpected pay out today could trip you up tomorrow. So check your account balance everyday and make sure this matches your cash flow forecast. If not, find out why right away to avoid any small mistakes causing bigger problems later on. We recommend that you open a dedicated sole trader account to separate your business and personal financial transactions. This will help you maintain your record keeping.
What to do Once a Week
Review your regular financial obligations once a week. Typically these will be:
You need to accurately track all your financial transactions. This is your bookkeeping which forms the foundation of your MLM business’s financial recording. We recommend our partner platform QuickBooks to help make your recording and reporting really easy. Alternatively we can provide you with an excel spreadsheet template or we can use Xero.
Make sure you are filing all of your receipts, invoices and other financial documents correctly and on time. This will help you maintain accuracy in your financial reporting. We can help you set up cloud accounting software to help you with this, such as partner Dext.
Accountancy for MLM will mainly deal with direct transactions. However make sure you are requesting any overdue payments as early as possible. Equally make sure you are up to date with any of your own outgoing payments. A smooth process whereby invoices are regularly generated and paid will help you monitor your cash flow.
Cash Flow Analysis
Monitoring your cash flow with a cash flow forecast will provide you with an early warning system for any shortfall in funds. This is one of the most important processes to stay on top of, for the success of your business. Aim to update your cash flow forecast once a week to help you plan ahead.
What to do Monthly
There are some essential processes that need to happen on time every month. Particularly an analysis of how your business is developing month by month and inventory of your MLM products plus monitoring your downline if you have one.
MLM Accountant can highlight the specifics that are relevant to you. But typically at the end of the month you will want to have completed these jobs.
Check your stock flow once a month and make any adjustment that you need to. Use your cash flow to help you make good business decisions.
Past Due Payments
Hopefully this will be rare, but make sure to follow-up on any past due payments, because you need to account for the delay in your cash flow.
Review Profit and Loss Statement
Your profit and loss statement is a core document that gives a clear view of your income and expenditure over a set period. This can inform key decisions about your business activities.
Quarterly and Annual Responsibilities
Most MLM businesses run smoothly week-to-week and month-to-month. However there are critical financial processes that every business must complete quarterly or annually. Some of these can seem daunting, mainly because you complete them less infrequently, but these are crucial to remain compliant. MLM Accountant will keep you informed about upcoming filing deadlines and you can always rely on our specialist team to take care of your MLM accounting needs if you prefer.
- Profit and loss statement
- Balance sheet
- Cash flow statement
At the end of the financial year on 5th April, you have nine months to file your statutory accounts: balance sheet, profit and loss statement, cash flow statement and a director’s report. MLM Accountant can prepare these documents for you. We will streamline your financial administration, allowing you to focus on developing your client base and promoting your MLM brand. Our specialist MLM accounting team will ensure you remain fully compliant with HMRC.
At MLM Accountants We Know How to Help You
At MLM Accountants we can help you understand the best solutions for the success of your business. All you need to do is get in contact with us at MLM Accountants. Call us today 0203 237 2927 for help and guidance.