Planning Business Finances
Start-up businesses face a tough task to setup successfully against their competitors with so many businesses being created in 2017. To make sure your business is guaranteed of success, every financial detail must be planned for accurately.
Roger Hatherall & Co can always offer a helping hand to start-up businesses to ensure you effectively plan and monitor your business financial performance.
Why Do You Need Planning?
At the beginning of 2017, there were a record 5.7 million private sector businesses. Getting off to a good start in your industry is essential to maintaining your business in the long run, even if a profit is not made in your first year of trading.
By planning when your business should be spending money and when you must limit spending, you can make a good revenue in your first year. 91% of businesses make it through their first year, however this can often be due to the amount of money they have from loans. In the long run, if you have repayments to make it can be more difficult, with 4 in 10 businesses failing before the 5-year mark.
With the help of an accountant, you can easily plan your first year in business, making sure steady payments are made to keep costs low and that you have an accurate cash flow forecast.
Create A Good Budget
It can be easy to spend and invest all your money into your business, but a budget should still be created. Whether this is what you want to spend over the course of the year, how to grow your business through investing or what your monthly spend should be, a detailed budget will help you successfully plan your business finances.
This will limit the amount of money you spend each month so even if you want to make purchases, if they are unnecessary, you will avoid them. In the long-term, this is a massive benefit, allowing you to return any payments and get set for future years in trading with more money to spend.
Record Keeping Effectively
As soon as your business has transactions, you should be keeping record of every detail. Financial details and transactions may be needed when submitting taxes in the relevant tax year. Although the information you need to give the HMRC is just for the last year, it is important to keep records for at least 5 years, so if investigations or queries are made, you have proof of the right payments.
If your business started in 2017, record keeping is important to successfully plan your 2018 too. Keeping records of all sales and income as well as your business expenses allows you to evaluate performance in the past and how you must improve in the future. It could also help you create a cashflow forecast. Using this to monitor what you expect to raise in revenue throughout 2018 will give you the guidelines you need to have a successful year whether you are a small or start-up business.