So you had a great idea for a business. You sketched it out on the back of an envelope and it all looked good, so you got it up and running, revelling in the honeymoon period of excitement and satisfaction at being your own boss. But did you stop to think about the less glamorous side of the business: bookkeeping? It may not be exciting, but it’s a legal requirement and without accurate tracking of your expenditure it can be the all too easy for your business to hit the rocks early on.
Follow these five pointers and you’ll be in fine shape:
1. Have a Business Plan And Maintain It
You need a solid business plan down in writing before you begin. The business plan will help you convince potential lenders that you know what you’re doing and will also help you keep a handle on where you’re headed. Make sure you keep up to date spreadsheets forecasting both cash flow and profit/loss. Cash flow is the major killer of new businesses, as it’s possible to run at a profit yet still have insufficient cash to maintain operations. Compare your monthly reports with your projections and you’ll be able to effectively manage your position before problems arise.
2. Call The Professionals
A lot of people think that hiring the services of an accountant or bookkeeper is an unnecessary expense, particularly if their business is small. It’s definitely possible to do your own books, as there is plenty of software on the market to help you manage things. However some of it can be quite complex to those unfamiliar with the software and basic bookkeeping practices. You can hire a professional to help you set up and most bookkeeping services in London offer excellent introductory deals to help SMEs get off the ground. Then you’ll probably only need their assistance to file your tax returns, resulting in a manageable annual fee.
3. Choose The Right Software
Again, using professional bookkeeping services can give you an edge here. Not every package is suitable for every business. If you’re business is going to upscale rapidly then you’ll need a package that can expand to meet your needs, but not everyone has visions of being the next Richard Branson. Investing in the wrong package can be costly, especially if you then have to switch over to a different system. Accountants and bookkeepers will work with a variety of clients, to the self-employed individual to SMEs and even big corporations so they’ll be familiar with all the options and can advise you on which package will be right for you.
4. Use A Business Credit Card
As long as you don’t abuse it, and keep the monthly payments on time a company credit card is a wonderful thing to have. You’ll get a monthly analysis which will let you see exactly where you’re spending your money. Use it for day to day purchases, even small items like office stationery as it can be easy to lose track of spending if you’re dipping into cash and losing receipts.
5. Save Your Taxes
The old cliché says there are two certainties in life: death and taxes. Don’t think you can get away without paying, so make sure you regularly put aside adequate amounts into a separate account to cover your Income Tax, Corporate Tax and VAT.
Follow these simple tips and you’ll be running a tight ship in short order. If you want to find out more information about how HW Fisher’s bookkeeping services in London can help your business please visit: http://www.hwfisher.co.uk/accounting-outsourcing-services/bookkeeping