Much shorter days, Halloween decorations on sale
, pumpkin spice infiltrating high street coffee shops – there’s no doubt that autumn is upon us.
As momentum increases again after the slower summer season duration, the fall months are the perfect time to take a great take a look at your business and begin preparing it for seeing out 2017 in terrific shape. Emily Coltman FCA, FreeAgent’s primary accountant, provides her top pointers for getting your books in order and making life more straightforward in the cold months ahead.
Check your cash
Do you understand precisely how much your service has made or just how much money it has on hand? If your organization’s cash flow is weak, then you could be heading for challenging times this winter, so it’s essential to ensure that you know just how much cash your organization has in its checking account.
If you’re not currently doing so, examine whether you can set up an automated feed in FreeAgent to pull this information from your bank directly into your accounting software to reduce data entry mistakes. Then ensure you inspect at least weekly, if not every day, to make sure that your bank balance is right in your accounts which all your transactions have actually been recorded.
Keep in mind if your bank balance in your accounts does not match what’s in your bank, you’ll have to recall and find the difference – it will not go away!
Send out your invoices
If your company issues billings to customers, make the most of any downtime you have to check through your records and make sure you have actually sent invoices for all the work you have actually done to date. Your customers can’t pay you if you do not invoice them!
You should likewise examine your list of open invoices – since often there might be some invoices that haven’t been paid since the customer’s just ignored them and you have not followed them up. There may likewise be old billings in your accounts that haven’t been paid and won’t be, perhaps because your client’s gone out of business.
Take a while now to cross out any billings that you make sure will never ever be paid, and to chase up those consumers who have not paid yet.
Round up your out-of-pocket expenses …
Out-of-pocket expenditures are organization costs that you paid for personally, for instance, if you went to the post office and bought a book of stamps to send out business letters, however, paid with your own money. As long as these are authentic business expenses, you can put these into your service accounts too, and they reduce the amount of profit you pay tax on, so it’s proper monitoring all of them!
Go through your wallet and look for stray invoices and make sure that you’ve included any of them which are service expenses in your accounts. If you utilize FreeAgent then snap them using your smart device, and they’ll be published to your accounts right away – then you can toss the paper invoices away!
… and examine how your expenses are categorized
When you’re putting your company
costs into your accounts – whether they were spent for from your company savings account or whether you paid for them personally – make sure that the expenses remain in the ideal categories. For example, a pack of envelopes would be finest categorized as ‘Stationery,’ while an expense from your office landlord would be ‘Rent.’ This helps you make sure that you’re declaring the correct amount of tax relief on your expenses and implies you can track where you’re spending loan in your organization.
Be aware of the categories which contain potential tax mistakes (for instance, sundries, subscriptions, and lease payments) and make sure that any costs you put in these categories are correct. If you have any doubts, speak with an accountant who should be able to advise you.
Keep an eye on when your tax is due
If your business is a minimal company, it will be due to pay corporation tax 9 months and one day after its year-end. If you’re a sole trader, you can anticipate being paying income tax and NI at the end of January. And whatever your company type, if it’s registered for VAT, then there will typically be a BARREL bill to pay every 3 months.
Make sure you understand how much tax you are because of pay soon, and have money put aside to pay for it. It’s likewise a great concept to set up a system where you keep a running overall of all the tax you owe and align this with your calendar, so you understand exactly when you need to pay it (or utilize FreeAgent’s Tax Timeline feature, which offers you live updates of your tax position and due dates).
Aim to the future
Take some time during the early autumn months to think about how your organization will handle the rest of the year. Christmas, in particular, can be a possible gold mine for many services, so what will it do for yours?
Will you use unique products, services or discount rates at Christmas? If so, could you pair with another regional organization which serves the same customers as you do, to use a joint Christmas plan? For instance, if you are a children’s celebration organizer, could you find a regional caterer, entertainer (magician, balloon modeler, clown) to team up with for unique Christmas occasions? If so, this might supply a welcome boost to both of your services.