Keeping in control of your finances is key to staying afloat - whether you're a sole trader, a small business, a contractor, or someone with income from several different sources.
It's all too easy to look back over your books at the end of the year and feel baffled by the figures in front of you. Take the headache out of your finances with these essential tips for staying on top of your business accounts.
1. Keep the taxman's money out of reach
When you're in business for yourself, income can be up and down. Regardless of whether this month is a big earner or business is slow, you need to put at least 20% aside for HMRC.
It's a good idea to set up a separate bank or savings account where you can put money away monthly. When it's time to pay HMRC, instead of scrambling around for funds to pay your tax bill, you can simply dip into your savings pot.
2. Boost your cash flow
Staying on top of your business cash flow means making sure you bring money in before you need to pay it out - so you don't find yourself left short. Be strict with invoices, chasing when the deadline is approaching, and consider asking for payment upfront. Offering discounts for early payment also works well.
Make it simple by giving people the information they need to pay you, and communicate regularly with suppliers so that you know exactly when you need to pay them, and how much. A good relationship will go a long way if there are any hiccups and you need a short payment extension.
3. Put business expenses on your card
We all use cards routinely these days to pay for the little things in life - but you may not realise that using this method of payment for small business expenses, such as topping up with petrol on the way to a meeting, helps with bookkeeping too, as you have a record of what you've spent.
Receipts can then be used to claim business expenses when you do your Self Assessment tax return. After all - every little helps.
4. Use bookkeeping software
Accounting and bookkeeping software is vital for anyone wanting to strengthen their grip on their finances. Many bookkeeping tools, such as SimpleBooks, will let you organise your finances on the go and give you guidance on:
- accounting jargon;
- collecting payments;
- tax brackets;
- raising and chasing invoices;
- creating quotes;
- generating VAT reports;
- bank reconciliation;
- claiming expenses.
Sponsored post. Copyright © 2018 SimpleTax offers tax return software that can help you manage your self-assessment and finances.