It can be hard to keep track of finances when you are running a small business because, chances are, you are doing pretty much everything and as we all know, you can only juggle for so long. It is important that you keep track of what money is coming in as well as what is going out. You should do this regularly, if you leave it, a week, a month, 2 months can go by without you really noticing and then where will you be with your finances?
There are 2 mistakes that small business owners regularly make, 1, not keeping track of income and outgoings, and 2, not using a proper accountant or bookkeeper.
Being able to keep track of income and outgoings is essential to maintaining a healthy bank balance for your business. Without updating your books on a regular basis, you will have no idea of how well or how badly your business is doing. You won’t know whether you will be able to draw a salary, pay your taxes, make sure your suppliers are paid and whether or not your business is making a profit. Neglecting your bookkeeping is not to be advised in any circumstances particularly if you are not good at filing either! Just imagine the mess you could be in if you don’t have the paperwork/receipts to support your bank balance.
Making use of the professional services of a qualified accountant or registered bookkeeper can save you a great deal of time, money and stress. It is best to choose one that will best suit your needs and who is familiar with the taxation system so that they can arrange payment of taxes. They will also be able to work out what allowances your business can have, what can be exempt from tax and what tax relief you are likely to be entitled to.
Business taxation can be quite complex particularly with the new HMRC PAYE real time system. Consultation with your accountant can help you set this up and get it running so that you do not fall foul of tax law. This new system is obligatory and if you have employees, each member of staff needs to have their own tax code so that they are paying the correct level of tax and it is to be paid when the employee is paid.
Business finance is a huge subject but if you keep accurate books, you will go a long way to ensuring your business finances are in good order.
What does 2015 hold for your small business? Are you itching to expand and diversify, or has 2014 left you wondering where to go next? Are you unsure about what your options are, and whether you really have the knowledge and resources to get to the next level?
Applying for finance could help you achieve your business goals, but many businesses remain sceptical about their chances of success. Here are ten things you probably didn’t know about business finance, proving that the odds aren’t stacked against you when it comes to getting your hands on the help you need.
1. Small businesses are a lot more likely to get finance than they think
Only 44%* of businesses planning to apply for finance are confident that their bank would agree to their request, yet the reality is that more than seven-in-ten (71%) of SME finance applications are successful. Right now across the country, banks are proactively getting in touch with small businesses to let them know that they qualify for a loan. Last quarter, the banks approved £6.6bn of new loans and £1.3bn of new overdrafts.
2. Your business loan could be available within two weeks of applying
Applying for business finance can feel daunting for small business owners. With businesses to run and limited resources, many could be worried that applying for finance will eat up time they simply don’t have. Yet on average some 75% of successful loan and overdraft applicants receive their funds within just 14 days of applying, meaning the whole process can take less than a fortnight – from application to money in the bank. 93% of those who successfully applied also said that the money they asked for was in their account plenty of time before they needed it.
3. If your application for bank finance has been turned down, you can appeal the decision
The process is much easier than you might think and, even if your appeal is unsuccessful, it will have no impact on any future applications for finance you make. If your business has a group turnover of £25 million or less – including if you are a potential start-up – you should be able to appeal your bank’s decision for any reason. It’s easy to kick off your application – find out more here.
4. A business mentor can help
Britain’s largest banks have joined forces to support a network of business mentors across Britain. Mentorsme.co.uk is the UK’s first specialist online portal for businesses looking for mentoring services, so if you need advice about how to increase your chances of business loan success, or just need some general advice, help is at hand.
5. The Finance Finder Tool can help you search for the right provider
Better Business Finance offers a Finance Finder Tool, where you can search through a database of over 500 local finance providers to find the right finance option for you. The tool produces a bespoke list of providers based on your business’ life stage, sector, location, why you need access to finance and how much you’d like to apply for.