Invoice

Business records checks: how to keep good business records

Invoice

HMRC requires business owners and sole traders to keep good business records so the correct amount of tax can be calculated and paid.

On this gov.uk page, HMRC makes it clear that businesses must keep records to fill in tax returns and pay the right amount of tax at the right time. HMRC also states that it can choose to check your records.

While the checks are usually conducted over the phone, HMRC can choose to pay you a visit and ask you to explain about your business and how your records are kept. They will also seek to verify a few transactions before deciding if your business records are adequately kept or not.

The thing is, even if HMRC doesn’t tell you to keep good business records, it is wise to make the process as part of your financial discipline. Business records are useful – for example, historical data can help you plan and set realistic goals for the future, making sure that your business remains profitable and on the right growth path.

In this article, our small business accountants aim to discuss:

  • Business records for a limited company
  • Business records if you are self-employed
  • PAYE records if your business employs staff
  • VAT records if your business is VAT-registered
  • Pay and tax records for your Self Assessment

Keeping business records for a limited company

HMRC is very clear that every limited company must keep two types of basic records: records about the company, as well as financial and accounting records.

Records about the company

As a company director, you must keep the followings:

  • Details of directors, shareholders and company secretaries
  • The results of any shareholder votes and resolutions
  • Promises made to repay medium to long-term loans at a specific date in the future and who the creditors are
  • Promises made if something goes wrong and it is the company’s fault (‘indemnities’)
  • Transactions when someone buys shares in the company
  • Loans or mortgages secured against the company’s assets
  • Register of people with significant control, referring to anyone who has more than 25% shares or voting rights, can appoint or remove a majority of directors, and can influence or control your company.

Financial and accounting records

You must keep:

  • All money received and spent by the company
  • Details of assets owned by the company
  • Debts the company owes or is owed
  • Stock the company owns at the end of the financial year
  • The stocktakings you use to work out the stock figure
  • All goods bought and sold
  • The suppliers you bought the goods from and the clients you sold to (unless you run a retail business where you can’t identify each customer)
  • Records that are used to prepare and file the annual accounts and Company Tax Return

The last point can include:

  • All money spent by the company, for example receipts, petty cash books, orders and delivery notes
  • All money received by the company, for example invoices, contracts, sales books and till rolls
  • Any other relevant documents, for example bank statements and correspondence

How long to keep these records

All company and accounting records must be kept for 6 years from the end of the financial year they relate to. Sometimes you are required to keep them longer if:

  • They show a transaction that covers more than one of the company’s accounting periods
  • The company has bought something that it expects to last more than 6 years, like equipment or machinery
  • You sent your Company Tax Return late
  • HMRC has started a compliance check into your Company Tax Return

If the records are lost, stolen or destroyed

In the event that your records are lost, stolen or destroyed, you must do your best to recreate them. You must also inform your Corporate Tax office accordingly and mention this in your Company Tax Return.

Business records if you are self-employed

If you are a sole trader or a partner in a business partnership, you must keep records of business income and expenses, which are:

  • All receipts for goods and stock
  • Bank statements, chequebook stubs
  • Sales invoices, till rolls and bank slips

If you are using traditional accounting, you must also keep:

  • What you’re owed but have not received yet
  • What you’ve committed to spend but haven’t yet paid out, for example you’ve received an invoice but haven’t paid it yet
  • The value of stock and work in progress at the end of your accounting period
  • Your year end bank balances
  • How much you’ve invested in the business in the year
  • How much money you’ve taken out for your own use

You do not need to send your records when you submit your tax return but you need to keep them so you can work out your profit or loss for your tax return. Also, when HMRC asks, you have records to show them.

In addition, you must keep records of your personal income.

How long to keep these records

You must keep your records for at least 5 years after the 31 January submission deadline of the relevant tax year. If you send your tax return more than 4 years after the deadline, you’ll need to keep your records for 15 months after you send your tax return.

If the records are lost, stolen or destroyed

In the event that your records are lost, stolen or destroyed, you must do your best to provide the figures. When you file your tax return, tell HMRC if you are using estimated figures or provisional figures. Provisional figures mean temporary estimates while you wait for the actual figures and once the actual figures arrive, you will need to submit them.

PAYE records

A large portion of small business owners today choose to outsource their payroll service to an accounting firm like us for cost-saving purposes. Providing complete payroll services, we take care of your payroll function (including records keeping) and make sure that it is complying with regulations.

Payroll records to keep are:

  • What you pay your employees and the deductions you make
  • Reports and payments you make to HMRC
  • Employee leave and sickness absences
  • Tax code notices
  • Taxable expenses or benefits
  • Payroll Giving Scheme documents, including the agency contract and employee authorisation forms

How long to keep these records

You need to keep them for 3 years from the end of the tax year they relate to.

If the records are lost, stolen or destroyed

With Payroll, you report the figures to HMRC every month so when you cannot find the records, HMRC may be able to help by providing you with the historical figures you have paid your employees.

If you are using estimated or provisional figures in your final payroll report to HMRC, you must tell them accordingly.

VAT records if your business is VAT-registered

If your business is VAT-registered, the records to keep are:

  • Sales and purchases
  • VAT invoices
  • A separate VAT account

If your business has a turnover of more than £85,000, you must follow the rules for Making Tax Digital (for VAT) which require you keep some records digitally.

The VAT account is a summary of your total VAT sales, total VAT purchases, and the VAT you either owe HMRC or can reclaim from HMRC. It can also include the VAT on any EU purchases or sales if you trade with EU countries.

When it comes to writing off bad debts (of more than 6 months old), things get a little complicated. In this case, you should keep a separate VAT bad debt account showing the total amount of VAT involved, amount written off and any payments you’ve received, the VAT you’re claiming on the debt, when you paid the VAT, the relief you are claiming, as well as the corresponding invoices. Talk to our friendly VAT team if you have questions concerning your VAT account or the VAT bad debt account.

How long to keep these records

You must keep VAT records for 6 years (or 10 years if you use the VAT MOSS service). For the VAT bad debt account, the information must be kept for 4 years.

If the records are lost, stolen or destroyed

You can easily reconstruct the data lost by reviewing your invoices or asking your suppliers for duplicated copies.

Pay and tax records for your Self Assessment

For company directors and PAYE individuals who submit Self Assessment every year, you must keep your records for at least 22 months after the end of the tax year the tax return is for. For example, if you send your 2018 to 2019 tax return online by 31 January 2020, you should keep the records until the end of January 2021.

For self-employed individuals, you know that there is no separation between and your sole proprietorship. In this case, you must keep your records for at least 5 years after the 31 January submission deadline of the relevant tax year.

Get your accounts sorted with Tax Agility

Business owners know the importance of keeping good records but not everyone has the time to go through and organise them – after all, your focus should be on running the business and not dealing with administrative burdens. Contact our teams at Tax Agility on 020 8108 0090 and let us help instead.

Our teams consist of:

  • Small business accountants: championing small business across London, our small business accountants aim to save you time and money by getting your financial statements in good order. We also help you to interpret the financial data so you can use them to make business decisions with greater confidence.
  • Tax accountants: be it personal tax, business tax, corporation tax, our tax accountants are here to help you minimise your tax obligations and maximise your income legitimately. We do not believe in shortcuts that can get you into troubles. Also, we can provide expert tax advice and assist companies when they are being questioned by HMRC.
  • Payroll specialists: providing a complete range of PAYE and payroll administration, processing and reporting functions. We can also provide specific payroll advice pertaining to your industry.
  • VAT specialists: taking care VAT registration, quarterly returns, VAT control and reconciliation, as well as providing the best VAT strategy for your business.

Give us a call today on 020 8108 0090 or use our contact form to get in touch.

 

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This blog is a general summary. It should not replace professional advice tailored to your specific circumstance.


cost control

How to control costs

cost control

Cost control is different from cost cutting. Learn this financial discipline to keep a lid on your costs and improve profitability.

Not to be confused with cost cutting, cost control is all about financial discipline and it involves planning, managing and preserving your financial resources. It's good practice to follow in both good times and bad – and if you control costs consistently well over time, your business should benefit from a stronger operating position and better cash flow leading to a rise in the company’s current assets (such as more cash in the bank), which will undoubtedly strengthen the value of your company and its financial position.

In this article, our chartered accountants for small businesses in London aim to discuss all you need to know about cost control, including:

  • The difference between cost control and cost cutting
  • Cost control applications
  • Who should be involved in the exercise
  • Top tips to control costs
  • Quick wins
  • Habits to help you succeed

The difference between cost control and cost cutting

The main difference between cost control and cost cutting is that cost control is about the management of costs while cost cutting focuses on lowering costs.

Cost control is also about discipline and stewardship exercised throughout the business journey, during both good and bad times. Cost cutting, on the other hand, tends to kick in when the business is going through a rough patch and you want to save as much as possible.

Cost control is applicable to direct and overhead

Broadly speaking, costs can be categorised into direct and indirect. Direct costs are costs attributed to the production of specific goods or services.
Indirect costs or overhead costs, on the other hand, are ongoing expenses associated with running a business.

Here is a quick example – assuming you are a small publisher producing atlases to colleges. Your direct costs are cartographers, designers, printing, storage and the delivery charges from the warehouse to your clients. Your indirect costs are office rent, an e-commerce site to take orders, phone lines and emails to communicate with your clients, staff to support and market the products, among others.

Cost control can be applied to both direct and overhead costs. For example, you may engage freelance cartographers when possible and negotiate with your printer for a better deal to manage your direct costs. When it comes to controlling overhead expenses, you can choose to modernise your e-Commerce site and marketing efforts, implementing referral programmes that only cost you when a sale is realised.

Who should be involved in cost control?

Contrary to cost cutting which is usually a top-down approach, cost control involves your team members liberally, particularly your managers. Your employees are more likely to cooperate if they can understand how cost control can benefit the company and also themselves.

Here is an example – a client has three bank accounts in three different currencies and in the past, their in-house bookkeeper spent almost £1k a year on bank transfer fees because no one was ‘thinking about such small costs’. When the company director decided to make financial discipline as part of the corporate culture, ideas started to flow. The bookkeeper switched to using an online money transfer service when paying overseas suppliers and the company immediately reduced its bank fees significantly.

It is also possible to involve your suppliers as part of the cost control exercise. Once your suppliers know that you are taking a proactive step to control costs, they are likely to share with you options that can help lower your bills.

As cost control starts with a careful review of financial data, naturally you want to involve your accountant too. Talk to one of our small business accountants in London if you are looking for someone who can help you identify under-performing cost centres and suggest ways to reign in control.

Top four tips you can take to control costs

1. Reviewing the variances between actual costs and budgets

The main purpose of budgeting is to reduce careless spending and improve profits.

Every month our small business chartered accountants share a vital set of financial data called the management accounts with our clients. Among them is a document called budget variance which tracks how much you have budgeted to earn and spend in a particular month versus how much you have actually earned and spent during that period. Ideally, you want the actual figures to be as close to the budgeted figures as possible, as they indicate good planning, good execution, and less careless spending.

It is worth pointing out your budgeted figures must be realistic, based on historical data and market trends. For example, you shouldn’t expect to sell £10k worth of Christmas decorations to consumers in March (unless the figure is after some massive discounts). Equally, you can’t have a budget of £1k a month for marketing but choose to splurge on TV commercials.

2. Enhancing internal processes

Many businesses have their own set of procedures created years ago and some of these are so set in their ways to the point that no one questions if they are still relevant. Review every part of your internal processes and make the necessary changes to increase efficiency.

For example, your staff may still spend time on endless meetings, often involving everyone in the team and each meeting has a designated note taker. In reality, many companies have started to streamline meetings with clearly defined expectations and use apps to take notes.

3. Focusing on quality

Quality control is an essential tool in manufacturing, not just in producing an excellent product, but also in refining the production process as it can lead to zero wastage. Even if you aren’t a manufacturer, you can still apply the same principle to every product and service you offer.

Once you start to focus on quality, you will see an increase in satisfied customers, which is likely to lead to more sales and referrals. Together, they will create a positive feedback loop that will yield more favourable results, such as higher quality that will enhance value and allow you to potentially differentiate and charge higher prices to more customers.

4. Be well prepared

No business is risk-free and yet surprisingly, many small business owners aren’t prepared for the associated risks, let alone having robust plans to manage an uncontrolled loss of something valuable.

Risks that can affect a small business may include economic risk, compliance risk, financial risk, operational risk, fraud risk, reputation risk, and competition risk.

For instance, business owners know that the economy can fluctuate between periods of strong growth and weakness. As a business owner, you must be able to analyse the changes and trends pertaining to your industry. Your business must innovate, evolve, and adapt to stay relevant. Also, it is wise to set up a rainy day fund to tide the company over during an economic downtown.

A few quick wins

Controlling costs should not be a burdensome exercise and here are some easy savings you can make immediately:

  • Finding alternatives to lower bank transfer fees – plenty of online money transfer services now charge less for each transaction than your bank.
  • Using cloud computing – subscription-based or pay-as-you-go software and data storage remove expensive infrastructure in-house. At Tax Agility, we work with Xero, cloud-based accounting software that streamlines many common accounting processes, saving you time and money.
  • Eliminate unnecessary costs – unneeded insurance, unused telephone lines, subscriptions that your staff don’t use, hiring staff when outsourcing can do the work, these are some costs you can eliminate immediately.
  • Negotiating with your suppliers – apart from asking for discounts and better payment terms from your current suppliers, find out if there are alternatives. Also, look for alternative suppliers where possible.
  • Rejuvenating your marketing programmes – try new approaches such as rewarding your loyal customers when they refer other buyers to you.
  • Maximising your staff’s skills – many modern offices look for staff who can step up and be responsible for a variety of tasks. For instance, a marketer today should be able to manage a CRM system, design a newsletter, write compelling product descriptions, know how to take good product pictures and publish them online, among other tasks. If your marketer can only do limited functions, consider training and encourage them to grow, or find somebody who can.

Good habits can help you reach your goals

Financial discipline is about being consistent in your approach when it comes to planning, managing and preserving your financial resources. It is definitely not a one-time exercise. To be successful in cost control, you must be able to plan, set realistic goals, review results and spend time to sharpen your financial knowledge regularly.

At Tax Agility, we know that not every small business owner has the time to plan and interpret financial data, this is why our small business accountants are ready to assist. Our biggest strengths are in number crunching and applying solid financial principles to help you create and maintain the economic value for your company. So give us a call on 020 8108 0090 when you are ready to instil some financial discipline into your business.

Tax Agility can help you to control costs

Cost control often starts with a careful review of your major cost centres – your direct costs, sales and marketing, finance and administration, IT support, legal costs, to name but a few – over a period of six to 12 months. After that, you proceed to rank each cost and identify areas where savings can be made.

Your accountant is vital to your cost-control effort. At Tax Agility, our small business accountants have the experience to help you review your financial data and suggest ways which you can take to manage your costs and improve profitability.

We have three offices – in Putney, Richmond, and also at Cavendish Square in Central London – conveniently located to assist company directors and owners across London with a complete range of financial and business services, including Accounts & bookkeeping; Payroll management; Management consultancy; Personal tax planning and many more.

Call us today on 020 8108 0090. Alternatively, use our online form to arrange a complimentary, no-obligation meeting.

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This blog is a general summary. It should not replace professional advice tailored to your specific circumstance.


How can management accounts be used effectively?

Produced monthly or quarterly, management accounts contain financial data that business owners can use to make decisions.

As a small businesses owner, success is always on your mind and amid your busy schedule, you are likely to receive a set of financial reports from your accountant every month or every quarter. These are management accounts and their purpose is to give you a snapshot of the business activities. The data also allow you to find out how healthy and resilient your business is – for example, is your business running efficiently? Does it have enough cash to pay its bills? How much working capital should you retain in your company?

At Tax Agility, our chartered accountants for small businesses in London send out management accounts to our clients regularly. What goes into each set depends on the clients and their business activities but typically each set may consist of:

  • Executive summary
  • Profit & Loss
  • Budget variance
  • Balance sheet
  • Aged receivables
  • Aged payables
  • Cash summary

In this article, we aim to discuss some vital data in management accounts that require the attention of small business owners.

Executive summary

An overview of your financial information, this shows the performance of your company, income and profitability in a given period.

Profit & Loss

P&L for short, a Profit & Loss account shows your company’s income minus its expenses. The income can be from sales or other sources like interest earned. On the other hand, expenses can be directly linked to your sales (known as cost of sales) or they can be general operating expenses like rent, insurance and office supplies.

If your income is greater than your expenses, then you have a net profit. But if your income is less than your expenses, then you have a net loss.

It must also be noted that your net profit (or net loss) does not equate to the cash your business has in the bank. For instance, last month you sold a dozen of office chairs to a dozen of clients and they are recorded in your P&L, but only half of them have paid you. The money owed to you by customers who have yet to pay is considered accounts receivable and it is recorded in your balance sheet which we will explain later.

A typical P&L usually has the following components:

  • Income
  • Cost of sales or cost of goods sold
  • Gross profit (income less cost of sales)
  • Expenses, anything from rent, national insurance, IT support, legal expenses to subscriptions
  • Net profit or net loss (gross profit less expenses)

How is the P&L account useful?

1. Determine efficiency

Gross profit (the difference between your income and cost of sales) is an indicator of efficiency. If your gross profit is high, it means your business is keeping more money from each sale made and is efficient.

2. Determine profitability

If your business is recording a net profit, you know that your business is selling products or services that are desirable and well-received, your price structure is right and your expenses are controlled.

3. Work out tax payable

All taxable profits made by your company are subject to corporate tax (the rate is 19% at present).

4. Work out dividends

Many small business owners draw a low salary and use dividends to make up the income. If you are taking this approach, you can only declare dividends to you and your fellow shareholders after the company has paid its corporation tax.

Budget variance

The budget variance shows you the original budget versus what was actually earned and spent in a specific period. Ideally, you want the actual figures to be as close to the budgeted figures as possible.

How is the budget variance useful?

1. Identify issues

Assuming December is a good month to sell toys and accordingly, you have a healthy £10k budget for toy sales in that month. But when January rolls around, you realise that toy sales were only £2k in the previous month, well below the £10 budgeted figure. In this case, the sooner you find out the reasons, the better it will be for the business.

2. Minimise careless spending

Assuming your marketing budget is only £1k a month, you are not likely to splash out on TV advertisements without knowing what positive results they can bring. Instead, you are likely to use the budget wisely, such as using the money to target online shoppers or run advertisements in your local areas.

Balance sheet

A balance sheet shows you what your business owns (assets) and what it owes (liabilities) at a given moment in time.

Assets

Assets are divided into current (items of value that can be converted into cash within the next 12 months) and fixed (items that cannot be converted into cash quickly). Examples of current assets are cash, accounts receivable and inventory while examples of fixed assets are equipment, vehicles and goodwill.

Liabilities

Liabilities are financial obligations that the business must fulfil. Liabilities are divided into current (bills that the business is expected to pay within the next 12 months) and non-current (bills that the business cannot settle within the next 12 months). Examples of current liabilities are accounts payable, PAYE payable, wages, pensions, VAT, among others. Examples of non-current liabilities are long-term loans and deferred tax (deferred tax usually happens when your financial year does not match the tax year).

Equity

For a limited company, the first line under equity is usually capital, which means the purchased shares. The next lines are current year earnings (net income or loss of the business for the current year) and retained earnings (reserves of profit made in previous years). Total equity refers to the assets left in the business after it has paid its bills and you (the shareholder) can have a claim to.

How is the balance sheet useful?

1. Compare performances

If you compare the numbers between two specific time periods, you can see if the business has performed better or worse. For instance, last month you had £10k in your net assets versus £2k a year ago, this means your business is doing better when compared to the same period a year ago.

2. See how the business is being funded

The formula for debt to total assets ratio is total liabilities divided by total assets. If the ratio is high, it means the company relies on borrowed money and money owed to others to operate, which is worrying.

3. See if the business can meet its financial obligations

The formula for liquidity ratio is total current assets divided by total current liabilities. Assuming your total current assets are £50,000 and your total current liabilities are £10,000, you have a ratio of 5, meaning you have £5 to cover every £1 owed, sufficient money to meet all short-term obligations.

Aged receivables and payables

Aged receivables or aged debtors show outstanding amounts your clients have yet to pay you. These invoices are usually outstanding for 30 days or more. In England, small business owners are painfully aware of the negative impact of aged receivables – they limit your growth and development, which in turn can put your business in jeopardy.

Aged payables or aged creditors, on the other hand, show you which suppliers your business owes at a particular time and how much you owe them.

Cash summary

Sometimes the management accounts also include a cash summary – information about your cash flow like how much money is leaving your company and what is coming in for a selected period. Ideally, you want the inflow of cash to be greater than the outflow, otherwise you will have something called a cash flow gap.

Cash summary is a powerful tool as the data allow you to rethink your budget and reallocate your resources. For more information about cash flow management, this article "Five ways to improve your company’s cash flow" will make a good read.

Sharpen your management accounts with Tax Agility

At Tax Agility, we have been championing small businesses across London since 2008. Our team of chartered accountants for small businesses work closely with our clients and our objective is to help your business grow.

Knowing that you are busy, we run management accounts for you and explain the key findings clearly, some of the things we look for may include:

  • Compare your original budgets versus actual
  • Check if your business is operating profitably
  • Check if your costs are under control
  • Work out how fast (or slow) your stock is turning over
  • Work out how many days your customers take to pay you
  • Determine how much sales you need to cover your expenses
  • Determine if your business can survive in an economic downturn

Based on this data-driven information, you can make sound decisions like the followings with confidence:

  • Evaluate which products or services are profitable
  • Work out the optimal sale price and allocate the right resource to sell your products/ services
  • Determine the financial effect of your management strategies
  • Lower your expenses
  • Modify your budget
  • Plan for the future
  • Measuring results

At the end of the day, every business deserves the best opportunity to succeed and your business should be no exception. To make money, your business needs to run efficiently, control costs, and sell products or services that meet the demands of your clients. Using data from your management accounts, you can make the all-important decisions that keep your business healthy and on track.

Tax Agility is here to help small business owners

Any questions you have pertaining to your management accounts, give us a call on 020 8108 0090 or use our online form to get in touch. The first meeting is always free and without obligation.

Our philosophy is simple: You win, we win.

 

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This blog is a general summary. It should not replace professional advice tailored to your specific circumstance.


Business growth concept

Managing your business finance for success

Every business exists to make money and grow, and one of the essential ways is through good financial management.

Getting your business finance in order through good budgeting, accurate cash flow analysis and effective use of management accounting all share a single objective, which is to improve your business efficiency.

When your business is efficient, it can convert all the available resources to maximise output with ease, thereby delivering better products and/or quality services, increasing sales, improving staff morale, enhancing customer experience, to name but a few. As a result, your business will be in a good financial position to meet its financial obligations and have strong cash surplus to put back into your business for growth.

In this article, our small business management consultants at Tax Agility discuss how we can assist small business owners in London, Richmond and Putney to better manage their business finances for success.

Understanding your business and objectives

A client once commented that he quit his 40-hour a week job to launch a business that required him to work 80-hour a week. Highly driven, he was managing most tasks by himself apart from business finances which he turned to our small business consultants. His reason was simple – the best way to unlock any business potential is to get assistance from experts who can provide honest advice based on financial statements.

Essentially, he was looking for a management consultant who can help him to create accurate budgets and forecasts, giving him data that he needed to make informed decisions. Today, his financial performance is strong, allowing him to have an office with a team of staff. Growth is stable and consistent, adding value to his company and achieving success.

The path to success often starts with a realisation that you may be too overwhelmed with day-to-day tasks and diversions to look at your business objectively. This is why engaging a small business consultant makes sense, though the key is to find one who can take time to understand your business and aspirations.

At Tax Agility, we often kick-start a no-obligation meeting by listening to you first. It is only through listening, understanding, and looking at your business through a clear lens that will allow us to create strategic plans that can meet your financial goals accordingly.

Improving business finance

Every business is unique and consequently, there isn’t a standard recipe which every small business owner should apply when it comes to improving one’s business finance. Areas that we may discuss with you include:

  • Ways to eliminate redundancies
  • Ways to reach your cost and revenue targets
  • Improving return on investment
  • Using historical financial data to do forecasts and budgets
  • How to analyse budgeted versus actual results
  • Reviewing of management accounting
  • Reviewing of credit control and cash flow
  • Analysis of key trends in your business
  • Analysis of risk management

Key benefits of improved business finance

Regardless your areas of focus, our small business consultants always strive to deliver three key benefits to your business and they are:

1. Financial control

Knowing how to make money doesn’t necessarily mean knowing how to best manage the money you earn. Managing money requires disciplines and conscious choices. Take cash flow for example, not many small business owners have time to monitor the amount of cash the business has in the bank or check which customers have paid you on time. Yet when you need to make a purchase, you may not think twice. In this instance, our small business consultants help to reign in control by providing cash flow forecasts that can guide your decisions.

2. Informed decisions will spur growth

A series of good decisions equate to success. If your decisions are data-centric, they will create a positive impact on your business finances quickly, which will further strengthen your financial position. Here is an example – many entrepreneurs believe that borrowing is good, but borrowing without knowing your ability to pay it back is far from good and will quickly ruin your business reputation. Borrowing to spur growth, for example, is only good if you have a repairmen plan in advance, as well as knowing where else you can cut expenses and save.

3. Set, measure, optimise

At Tax Agility, we believe in setting KPIs and measuring performances that help your business to achieve its goals. Financial numbers from every week, every month, every quarter, every year should be tracked and measured. It is worth bearing in mind that even the best plan may lead to occasional bumps along the way, which is why optimisation is essential. Having our small business management consultants on hand to guide you can make all the difference.

Tax Agility can help to improve your business finance

At Tax Agility, we understand that small business owners have limited resources. Our aim is to help you transform the limited resources available to you into success by focusing on your business finances.

We believe in growing together with our clients – when you grow, we grow too. This is why our dedicated small business management consultants work cohesively with you to help build your business and take it to the next level. We use financial numbers and data to recommend changes, mitigate risk and improve profitability.

Most important, we provide fast, quality management support to small business owners without any hidden charges. Give us a call on 020 8108 0090 today because your business deserves the best opportunity to succeed.

Payroll consideration

A growing business requires staff with skills that can help your business expand further and faster. Your staff can consist of short-term contractors or permanent employees. Contractors are often cheaper, more flexible, and they tend to be specialists in niche areas like database development and network security which you only require from time to time. On the other hand, permanent employees are focused and loyal to your business; they are the people you can rely on to grow your business.

Employing permanent staff requires PAYE, National Insurance, a pension scheme, as well as other benefits your company provides. These are time-consuming administrative work. Instead of hiring a full-time payroll employee, a cost-effective option for many small business owners is to outsource the payroll function. At Tax Agility, our payroll services for small business are here to assist payroll preparation and compliance for you.

VAT

VAT is a complex subject and when a business experiences strong growth, it tends to involve international suppliers and customers. Trading internationally, meaning importing goods from and exporting goods to other countries, often leads to more questions about VAT.

If expanding internationally is on the card, the general guidelines for VAT are:

  • If you are VAT-registered, the suppliers from an EU country do not charge you VAT for goods that they sell to you. However, you must account for the VAT yourself.
  • Suppliers from a non-EU country do not charge you VAT for goods that they sell to you, but you will pay import VAT before customs release the goods to you.
  • If you are selling goods to customers in EU countries and they are not VAT-registered, you will be charging them the UK VAT. But if your customers are VAT-registered, you can then zero-rate (ie not charging VAT) on the goods you sell to them.
  • If you are selling goods to customers outside of the EU, you do not normally charge VAT.

For solid VAT advice, sector-specific VAT issues, completion of VAT returns, and other VAT concerns, talk to one of our VAT service team for small business today by calling 020 8108 0090.

 

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This blog is a general summary. It should not replace professional advice tailored to your specific circumstance.


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