Over the past decade office desks have changed massively, no longer do we see the dominance of calculators, notepads, writing equipment and instruments we used to update company accounts – our desks are now clutter-free and the computer has taken over. All of our trusted aids and devices can now be accessed through our PC, tablet or even our mobile phones. Most businesses have welcomed these changes, as with them they have brought dramatic increases in efficiencies and improvements in the way we work. Yet, one out-of-date accounting tool that many companies still hang on to is the “trusted” spreadsheet.
Small Business Finances
Doing business on an international scale has almost become the new norm. Today, it’s not only long-standing conglomerates that travel abroad to make business deals or sell products to other countries. Thanks to the internet, even the smallest businesses are obtaining international clients. Stay on top of this shift by learning a little about business etiquette around the world.
With the evolution of financial technology, international money transfers are now easier, faster, and more secure. One thing that hasn’t changed, however, is that these international transfers still come at a steep price.
Money fuels the business world, so regardless of whether you personally view it as a worthwhile goal or merely a necessary evil, you need to keep it at the forefront of your thoughts. Consider that entrepreneurs who just expect their finances to work out aren’t entrepreneurs for very long. You might not be able to control exactly how many clients you win or how much money you make, but you can ensure that all your sums add up and you know precisely where you stand.
A shareholder has the right to receive dividends. When the company has retained profit available, they may declare a dividend. A dividend is a share of profit paid out of the company which is proportionate to the number of shares held.
As a small business owner, there will be a number of business insurances that you will consider getting, from professional indemnity insurance to private healthcare insurance. Another type of business insurance you might consider getting is Keyman insurance, also known as Key person insurance.
While having fun may not be a mandatory prerequisite for succeeding in the business world, if you have fun performing vital tasks, you stand to receive a number of benefits. First of all, you’re bound to pay more attention to what you’re doing (instead of just dozing off in boredom), thus reducing the likelihood of a mistake being made. Second, you’re less likely to procrastinate and postpone handling this task, which means that you’re more likely to handle your tasks in time and regularly update them. Finally, if you like what you’re doing, you’ll learn a lot quicker, seeing as how you’ll already have a strong intrinsic motivation for such a thing.
Having good cash flow is fundamentally essential for any business wanting to run smoothly and successfully. A recent UK study found that, on average, SMEs spend more than £1m a year on business-related expenditure such as staffing costs, rent, office equipment and supplies. This highlights how vital it is for SMEs to have a solid grasp of their incomings and outgoings so they can plan ahead and meet these costs.
When you have formed a limited company, one of your first tasks will be to choose the best bank account for your new business.
Pensions remain one of the last remaining significant tax breaks available to contractors, freelancers and business owners. And with the sweeping changes to the flexibility surrounding how you access your pension, there has never been a better time to invest. There are a variety of pensions for directors of limited company and contractors available.
There is no doubt that accounting software can come with great benefits for your small business. From helping you keep up with the tax deadlines to making it easier to keep records of your business finances, accounting software can be a great help. But how do you choose the right one?
As a small business involved in overseas trading, there lies a high risk due to fluctuating currency. More specifically, the volatile nature of the marketplace and mitigating factors which directly impact the value of selected currencies, both at home and the trading country. As a small limited company or an overseas contractor, it is vital to actively measure the risk and equip your business against changing exchange rates. Failure to do so could tip your business towards financial difficulty, disrupting company cash flow and the overall profitability of the company, writes Keith Tully of Real Business Rescue.
Look, we’ve been there. You’re focused on delivering a project. Then another. Then something enormous comes along and takes up your time. Before you know it, the year’s up. And then it suddenly hits you that you’ve got a self-assessment return to file, and you’ve got absolutely no idea where to start.
Many business owners, including contractors, may have found it difficult to secure a competitive mortgage in the past. However, more enlightened lenders and mortgage brokers are happy to provide a mortgage for limited company directors, who may find it hard to prove income on a ‘traditional’ basis.
Running and maintaining a successful business is incredibly hard work. It doesn’t matter how big or successful you are, a start-up, a big hitter or even if you are dominating the marketplace, things can go wrong at any time. The business plan just might not be right for the market or an unexpected cost could set back your cash flow.
Many small business owners are reluctant to move banking providers, even if they can get a better deal elsewhere. The perceived ‘hassle’ associated with a switch is the main reason. However, since 2013, the major banks have all guaranteed to complete a business bank account switch within 7 days.
Cash flow is the beating heart of a business, so it is absolutely vital that you keep on top it. Without a good cash flow, a business’ chance of survival decreases immensely. Whether you are self-employed or run a small business, having a decent flow of cash will keep your business alive. Forecasting your cash flow can be hugely beneficial to small businesses, as it helps you give you a good idea of your finances. It can be a time-consuming process, however it is essential.
Cash flow is the term for the money that flows in and out of your business. From petty cash to business capital, cash is what keeps small businesses alive. While it is usually measured monthly, quarterly or annually, your cash flow should always be at the forefront of your mind.
The road to success for any start-up is undoubtedly tough. Couple this with the fact that around 50% of all small businesses fail in the first five years, with the figure rising to an astronomical 90% for tech start-ups, and the picture starts to look somewhat bleak. However this shouldn’t be a discouragement, instead, it should be a call to organise your business operations well from the beginning so that it’s addressing issues before they can cause real problems.
Investing in one’s own business comes with a high risk of not achieving the expected results. The level of competition in the UK’s market is high: since 2015, more than 500,000 start-ups have been launched every year. In the first six months of 2018, more than 300,000 new companies have been registered.