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29th August 2018
Summer holidays can mean many things – sea, sand, sunscreen – but it’s also a great time to reflect and think about how to improve your business, where you’re heading and what the future could bring.
While you’re lying on that beach in some far-flung exotic destination – or somewhere even closer to home this year bearing in mind the weather we’ve been enjoying – sipping a cocktail and watching the kids splash around in the surf, thoughts inevitably turn to your business.
It’s impossible to divorce yourself entirely from your company’s affairs, because you’re striving to make it work, to make it as profitable as you possibly can, to get the absolute most out of it. You’re driven to succeed. And rightly so.
Reflection is good. Reflecting on what you have learned so far in your journey can make experience more productive. Reflection can build your confidence in your ability to achieve that goal.
So, you’ve had time to think about your company, and how you could re-organise yourself and your business. Now what do you do about it?
We’ve come up with four tips to help, that can give you some food for thought. Four ways which can help you take a step back from the day-to-day and look at how you could improve what you do as a business.
Cash flow problems, or finances that end up in a mess, can be the undoing of any business, so it’s crucial to plan properly.
By keeping a close eye on your finances and sticking to a plan, you can avoid any pitfalls along the way and keep track of what’s going into and out of your company.
There are sophisticated tools out there to help, such as looking month by month at what your company is spending and what’s coming in without you ever getting caught short, but circumstances change and, when they do, so should your financial plan.
No one plan is the same for all, so it’s a good idea to discuss this regularly with your accountant to make sure you get the plan that works best for you.
Sticking to a business plan will ensure your business runs smoothly and, crucially, isn’t running on empty.
A business plan will also enable you to look at the greater goals, such as the growth of your business. So, for example, if you know you want to make more money, you need to take on more people, that means salary and you need to budget for that.
Some of the techniques used by top money managers include:
Whether you’re self-employed or run a small business, you will be in a much better position when your tax bill arrives if you know for sure you have the money set aside for it. Who needs the shock of realising you haven’t got the cash to hand?
If you take the time and effort to save for your tax bill and keep your accounting records up to date, it’s preferable to being hit with the bill and then having to scrape around trying to find the money.
Once you get into the habit of saving little bits here and there during the course of the year, you’ll be better off for it. The percentage of your profit that you get taxed on varies depending on what type of business you are. For example, if you are a sole trader, generally speaking its around 20% whereas for limited companies it is 19%.
Here are a few tips to bear in mind when it comes to budgeting for tax:
Making Tax Digital (MTD) will be here in April 2019, so you’re going to be in a much healthier position if you start thinking about it now rather than wait until the deadline and find yourself in a flap.
MTD is a simpler, more effective and efficient UK tax system – which aims to be fully digitalised by 2020 – and will mean the end of self-assessment.
If your company has a turnover above the VAT threshold of £85,000, then you will be required, from April 2019, to maintain digital records using compatible software, and provide quarterly updates to HMRC.
Smaller businesses, with an annual turnover of less than £10,000, will be exempt, although they can voluntarily choose to use the MTD system.
It will take some companies longer than others to comply with MTD, which is why it’s best to start looking at it now and see what changes need to be made. Doing it sooner rather than later will avoid a whole lot of stress.
And it’s worth bearing in mind that HMRC will penalise you if you fail to use MTD.
Bookkeeping and administration takes time and resources – all of which can be better spent on growing your business and making new relationships.
Outsourcing bookkeeping is one less thing you have to worry about, and keeping all your accountancy requirements under one roof will make managing them easier and more efficient.
Bookkeepers are trained and use the same financial recording methods as accountants. This enables your accountant to quickly and easily process your financial information. A bookkeeper will:
We’ve helped many businesses successfully implement all four of these tips. If you’d like to discuss any of them further with us, please fill in your details below and one of the team will be in touch. Alternatively, give us a call on 0333 200 0714.
have you read our previous post?