A Guide to Small Business Finances For Beginners

 A Guide to Small Business Finances For Beginners
https://www.pexels.com/photo/calculator-and-pen-on-table-209224/

A strong financial plan and management is at the heart of any business's success, no matter how big or small. When you decide to go it alone and start your own small business, it’s impossible to know everything right away. However, your finances are simply too important to be neglected. So, here are some of the most important things small business owners need to know about finance for their business.

 

Don’t mix your finances

Your business expenses should always be kept separate from your personal expenses as a small business. There are several reasons for this, for example:

  • You and your business are taxed separately
  • You can track the financial progress of your business accurately
  • There will be no issue auditing your business finances
  • You won’t e tempted to dip into personal expenses for your business and vice versa

Keeping a decided business bank account for your business finances can actually reduce the amount of tax you need to pay. This is because you can easily track and prove each and every penny and easily claim your allowances and expenses.

 

Manage your cash flow

Simply put, cash flow is any money that moves into or out of your business over a period of time. Cash flows into your business daily in the form of income and profits from the sale of your goods or services. Similarly, it flows out of your business in the form of expenditure when you pay for things needed to keep your business running, such as rent, insurance, payments to suppliers, etc. So, you can imagine how important it is to stay on top of all this money that comes and goes.

Some of the simple ways you can stay on top of cash flow are:

  • Create  a cash flow statement and forecast – these simple financial documents will give you an overview of your actual monthly cash flow as well as what you’re forecasted to make/spend
  • Think about terms of payment – this is going to ensure you are getting paid properly and promptly for the goods or services you provide through things like invoicing, contracts, or simple payment at the point of purchase/service
  • Choose who you do business with wisely – do your research and make sure you understand who you’re working with
  • Set clear and non-negotiable payment terms
  • Introduce late payment fees and make these clear upfront

 

Keep on top of your taxes

Regardless of their size, all businesses in the UK must pay taxes. Small businesses are required to pay a number of taxes, depending on the performance of the business and the work it does. Taxes are paid to HM Revenue & Customs (HMRC), and it is your responsibility as a small business owner to know which taxes you are required to pay and to calculate. Missing tax deadlines can incur hefty fines from HMRC – so make sure you don’t miss them!

Some of the most common taxes you might be expected to pay include:

  • Corporation tax
  • Value-added tax (VAT)
  • National Insurance
  • Income tax
  • Business rates

 

Don’t be afraid to get help

Not everyone is a finance wizard just because they want to start a business. Maybe you’re much more of a creative person, or a strategist, a marketing whizz, or maybe you’re a people person, and your skill lies in securing deals and clients. There’s no shame in not being all-knowing when it comes to financing; as long as you know when to ask for help, you should be fine.

If you’re not financially savvy, make sure you get an accountant on board to keep you right. Your business would be much better off in the long run if you hire an experienced accountant who can keep your finances on track and manage your cash flow on an ongoing basis. These professionals know everything there is to know about business and their money and will be able to handle everything from day-to-day spending to taxes and expenses, leaving you free to focus on running your business.

Similar Articles

Key Sales Pipeline Management Metrics For Measuring And Organizing Multiple Pipelines

If you are using an all-in-one CRM software, you will find that there are a plethora of B2C and B2B sales metrics feeding hundreds of inputs into your sales pipeline.
 

Different Suggestions For Company Growth In Real Estate Businesses

With approximately more than even 2 million active buyers, real estate is a pretty crowded marketplace in the U.S. that can make any real estate agent feel impossible to grow their realty business. Nevertheless, the good news is – growth is within your hand.

Different Sales Challenges and Solutions For Remote Sales Teams In This COVID-19 World

In business, all salespersons wish to end their months celebrating their wins on a happy note. But unfortunately, for most of the people in sales, their months end with a sense of utter disappointment, filled with exasperated regrets and so are often plagued with challenges that affect their performance and results every month.

Business Growth Ideas-Different Ways B2B Companies Can Thrive In A Virtual Selling Landscape

We have come across a time nowadays when e-commerce websites and paid searches can compete with human sales reps on conversion metrics and for that traditional sales roles in modern times are taking a hit.
 

Tips On How You Can Pump Up Your Business to Business Lead Generation and Management Capabilities

How does your B2B organization attract and handle leads? Apparently, it may seem to be a simple question, but very few of the companies that we spoke, had a definite answer.

What is European MDR?

The EU MDR or European Medical Device Regulation states the high standard of safety measures and quality of the device. This is mainly for medical devices in Europe and passes through an effective quality check process before they are available in the market for use. It has been through many revisions in the past years.

How can you manage sales teams - without stressing them unnecessarily

In our experience, we have observed that many sales managers are promoted based on their outstanding performances. Nevertheless, closing sales does not necessarily mean that you automatically know how to manage sales teams which can lead to business growth.

Sales Team Motivation Ideas That Can Inspire Business Growth

If you want your sales team to be successful and productive, it is not just enough to provide them a desk and salary and say “get to it”. Well, your sales reps might be master salespeople, knows all that is needed to use an easy to use CRM tool to perfect their sales processes and workflows

Different Steps for Creating a Sales and Marketing Strategy From The Scratch

At their best, marketing and sales teams are acquaintances. At worst, they are enemies. At least that has remained the situation in most organizations. Now, while a bit of healthy rivalry never hurts, the marketing and sales teams in most businesses suffer from miscommunication