This is the second in a 2 part series that attempts to demystify the language of accounts. If you’re wondering what happened to A-H then hop over here to check it out and we’ll see you once you know your assets from your equity!
Do you know your accruals from your prepayments, or your assets from your liabilities? If you think that I’ve just dipped into a foreign language, then this short glossary of bookkeeping terms is for you. Running a business can be challenging enough, without having to also learn what feels like a whole new language. There’s a lot to cover, so we’ll look at A-H in this post, and I-Z in a future one.
This week saw the Chancellor’s first and last spring budget, with lots announced that will give those of us who are self-employed lots to think about. Let’s take a closer look at some main points of the budget.
Sadly there are always parts of running a business that aren’t quite as enjoyable as others, and for a lot of people the task at the top of that list is bookkeeping. It might not be your favourite way to spend a couple of hours, but good financial records are so important to creating a successful business. Here are 4 common mistakes a lot of business owners make, and how to avoid them.
Many businesses fail in the first few years, and the most common reason? Cash flow. You may be doing pretty well on the sales front, but are you being paid on time? Or you’re covering your monthly outgoings just fine, but what about that big IT purchase you’d like to make in 9 months? Don’t fall into the trap of making decisions based on the money you have in the bank - your balance is an illusion. It’s entirely possible for your business to be profitable and yet still run out of cash.
When you’re running a business, the finance side of things is often the one area that falls down the list of priorities as dealing with your accounts can be scary, even when things are going well! A good way of ensuring that you always have current financial knowledge, without taking your time away from what you do best, is to outsource your bookkeeping.
I’ve seen many bad invoices in my time, you’d be surprised how many businesses don’t actually include their payment details! Late payment of invoices is the bugbear of every business and it’s important to have good processes in place for dealing with white rabbits (people who are always late!) But you also need to make sure that you’re making it as easy as possible for your customers to pay you, and a lot of that starts with the invoice itself.
We’re living in the digital age and deserve a transparent and accessible tax system. We also shouldn’t need to tell HMRC what it already knows. On the face of it reducing the burden on taxpayers and providing clearer information can only be good, right?
You’ve just started your own sole trader business and you’re full of excitement and keen to get on with doing what you love, and that’s probably not bookkeeping. Good financial records are the foundation of your business and could determine its success. Following these three simple steps will mean that bookkeeping is no longer a burden.
So you’ve won the client and completed the work; the hard part’s over now, so you can sit back and wait for the money to come rolling in on schedule…right? Sadly this isn’t the case for a lot of small businesses, according to data from Bacs Payment Schemes Ltd the average UK small business is owed £36,186 in unpaid invoices. Late payments can cause big problems for your cashflow, as well as taking up a lot of your time and distracting you from the areas of your business you enjoy.