Collaborative post:
As a business owner, it’s absolutely crucial to keep on top of your financial affairs to ensure the cash keeps flowing and you don’t end up facing any unforeseen debts. If you’re not particularly clued up on accountancy, you could consider hiring a bookkeeper or working with accounting software so that you can more easily manage the business’ income and outgoings, particularly as expenses can quickly add up. Regardless, it’s certainly worth getting clued up on some of the terminology associated with finances, like PAYE, different types of tax, VAT and other keywords and phrases.
Limited companies are legally required to have a separate business bank account, but this is wise even if you’re a sole trader or operate another type of company. It’s a good idea not to mix up your business and personal finances, as it makes your tax returns more complicated and may lead to unexplained losses. Generally speaking, having a separate business bank account will make it easier for you to keep track of your cashflow.
Make sure to pay yourself. As a business owner it can be easy to focus on investing your money back into the company, as your main priority is obviously to ensure it succeeds. However, you have an integral role in the company and therefore need to be compensated accordingly. Of course, this doesn’t mean you should pay yourself all of the profits, as it’s also a good idea to set aside some money for unexpected costs in the future.
Try and keep in mind ways you can save money on things like your utilities and travel costs. You won’t necessarily need to stay in the most extravagant hotel whilst on a business trip and it’s best not to go with the first energy provider you find; it’s better to seek out opportunities where money can be saved and then invested back into the company.
Sarah x
