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April 17, 2015

Give your business finances a spring clean

Spring has sprung at last. Now is the perfect time to clear the cobwebs away, spruce up your business finances and get 2015/16 off to a flying start with a clean financial slate.

Here are six steps to put your finances in order and stay in control:

1.  Get to grips with cash flow – When was the last time you did a cash flow forecast? Start today by looking at how much money is coming in and out of your business each month. This will identify peaks and troughs and help you plan the year ahead.
2. Improve your tax efficiency – Have you discussed your tax liability with your accountant or IFA recently? Have you explored whether you are due any capital allowances on equipment? Also don’t forget to claim your £2000 National Insurance contributions (NICs) this financial year. Speaking of which, make sure you’re up to speed with new tax changes announced in the Budget – Class 1 secondary National Insurance contributions have been abolished for under21s.
3. Work smarter – Are you still doing your accounts manually? Make life easier by using cloud-based accounting software. Online packages, like Xero, enable you to focus on running the business and make informed decisions based on real-time finances. It can also help save valuable time and improve efficiency by producing online invoices.
4. Ditch the paperwork – move your business into the digital age and scan all your documents and receipts. Use an online secure hosting service (there are many on the market to choose from) and you’ll never find yourself searching through dusty cardboard boxes again – you will always have copies to hand. If you are a sole trader or partnership, the HMRC wants you to ditch the paperwork too. Last month’s Budget announced the end is nigh for paper tax returns to be replaced with digital tax accounts in the future. Watch this space!
5. Keep an eye on expenses – Have you reviewed your business expenses recently? Look at ways to save money on expenses and you’ll see your bottom line improve. If you don’t track business expenses then get cracking and set up a monthly mileage record.
6. Blow the dust off your business plan – We’ve all done it, spent time writing a winning business plan only to put it to one side and forget about it! Now is the time to review your business goals and assess where the business is heading and what you want it to achieve.