Bookkeeping is vital for the running of a business, so include it into your weekly routine. By keeping track of your company’s incomings and outgoings, you will always have a basic idea of what is in the bank, allowing you to budget accordingly.
Come tax time, hiring an accountant is always advisable. However, that doesn’t mean that you should become reliant on their knowledge of the tax system. With all its loopholes and tax breaks, this system is intricate and confusing at best, but the more educated you are on the subject the more money you can potentially save in the long run. Now is a better time than ever to get to grips with the UK tax system. With changes in the tax return procedure and more benefits, small business owners are finding it easier to keep on top of their tax obligations.
Costs fall under two categories: fixed and variable. The fixed costs are expenditures such as rent, utility bills, insurance and marketing costs. Variable costs are the likes of purchases of products intended for resale, staff wages or even production supplies. Monitor these expenses regularly to keep track of any overspending.
Judging your company’s future performance will only assist you further in keeping control of your finances. If it is a seasonal company, expect less money to come in during off-peak times. The further ahead you plan, the more prepared you are for any problems you might encounter. Check out some of these software products to help forecast your accounts.
It’s all well and good having an accountant take care of your finances, but obtaining a basic understanding of your accounts is vital. Knowing if your business has increased in profitability or plummeted into debt is a basic business practice. It all comes down to the bottom line. Being aware of how much money is in your bank account at all times will help you navigate your business in the right direction.