Business can be challenging enough without having to worry about finances. Business stress = personal stress.

A lot of business owners I speak to are reactive with their finances, one thing leads to another and you never get ahead. Small changes can have a huge impact on your business and lifestyle.

Improvements to make your business finances less stressful

Here are 7 easy improvements to make your business finances less stressful:

  1. Set up your VAT Direct Debit – VAT quarters can come around quicker than you can say HMRC and it’s so easy to forget to make payment. Set up a Direct Debit in your Gateway so the payment comes out automatically each quarter. The payment comes out 3 working days after the deadline, so you also get more time!
  2. Submit your self-assessment tax return early – If you get your tax return submitted nice and early, you will know exactly how much your liability is and you have months to save if needed. At Every Cloud I try and get all returns submitted by 31st July. If you need more convincing here are 6 reasons why you should submit your tax return early.
  3. Set up tax pots – Put away money for VAT and Corporation tax (Video: A handy tip to save for your corporation tax), so there’s no shock when your bill comes around. Most banks now have something called pots, where you can cipher off money from your main account into a separate pot. I save 20% of all revenue into a corporation tax pot.
  4. Use accountancy software – All your financial information is in one place, so you know exactly where you are with your finances. And keep it up to date. A lot of decisions need to be based on accurate financial information and if that takes weeks to put together, it’s just making life difficult for you.
  5. Multiple payment options for invoices – Using software like GoCardless, (Affiliate link £100 reward if you collect £500, let me know if you sign up) it’s easy to take payment automatically upfront, it decreases your debtors, the amount owed to you and creates a seamless process, which links with Xero nicely. You can get clients to set up GoCardless before hand so payment can be taken automatically – your business, your rules.
  6. Budget your month’s expenses – I recently read an amazing book on this topic called Profit First. It’s based on the principle that if you have a bigger plate you eat more, so it’s about taking your profit first and leaving a set percentage for expenses. I have been trialling putting a set amount of expenses into an account each month and it’s been a great way to keep costs low and manage the amount I am spending.
  7. Monitor your director’s loan account – If you run a limited company one of the most important balances is your director’s loan account, do you know what your balance currently is? This balance affects your personal tax liability, the profit needed to declare dividends, and if overdrawn it can trigger something called S455 tax, where you need to pay tax on the balance.

The majority of the changes above can be done very easily and will have a huge impact on your lifestyle and your business. If your business is going to be the vehicle to support the lifestyle you want, that vehicle needs to be well tuned.

If you would like support implementing these and working with a proactive accountant, to support you growing your business, book a discovery call.