Running your own business is extremely exciting, but can also seem a little daunting.
There is plenty of information available to you online, but knowing where to look and trawling through irrelevant content can be very time consuming, not to mention confusing.
At a4c we have created this simple, straight-talking guide to highlight the most important things you need to know as a business owner, but we are also on hand to answer any questions you may have.
There is a legal requirement for businesses to keep financial records (money spent and money received, assets owned, debts or loans, stock levels etc).
Evidence is required in original format, i.e. the receipt or invoice, and records must be kept for at least 6 years. Failure to do so can result in a fine from HMRC.
You may have heard the phrase ‘income less expenses equals profits’.
This is the foundation that your trading accounts are built on. The tax you pay will be calculated from the profit.
Income is also referred to as Revenue or Turnover.
This is the value of sales made for the provision of your products or services.
The simplest way to record these transactions is by issuing invoices and checking that funds entering your bank account match the invoice total.
There are a wide-range of items that can be classed as expenses.
These could include items used by the business such as equipment or materials, it might cover the purchase of postage stamps, or paying bills such as insurance premiums and accountancy fees.
The key with expenses is that they are incurred ‘wholly, necessarily and exclusively’ in the line of business. (This is a HMRC term you will come across frequently.)
Managing your time
Most business owners would agree that the downside to running your business is the administrative burden.
At a4c we aim to relieve as much of the stress as possible but there will still be elements that rely on your input.
The key to success is being organised from day one and putting simple processes in place that you can stick to, such as Xero Accounting Software and the Dext receipt management app.
If in doubt…
Remember that a4c offer our clients unlimited accounting support, therefore if you have any questions about your accounts or business transactions then please don’t hesitate to give us a call on 01737 652 852 or email firstname.lastname@example.org