You have a great business idea; you have done comprehensive market research and written a business plan. You are ready to start your business and make your fortune. You may have covered your start up costs, but have you thought about what you do when the money rolls in and business costs roll out? Whatever business you are going to operate, you must think of your finances and how to manage them. It is vital to know what your financial position is at all times. The following will give you advice on how to better organise your business’s finances.
Employing an accountant
This is an option many small businesses choose. You may not be knowledgeable enough to tackle all the necessary administrative duties such as invoices, salaries, VAT, tax and year end returns. You may be able to muddle through in the early days, but this can be a time-consuming and frustrating task at the end of a long working day. A qualified accountant will take all this hassle from you and manage all your finances. It can work out expensive, but it does enable you to concentrate on making your business successful.
Umbrella Companies
If you are an independent contractor, you have the option of being part of an umbrella company. This will give you ‘employed’ status and allow you full control of your business, but all administrative tasks will be taken on by the umbrella company. Taxation will be dealt with through the PAYE system and National Insurance contributions will be processed by the umbrella company. You will be able to claim any legitimate expenses as you would if you were working independently. You will need to provide the company with all tax and national insurance details and provide them with weekly/monthly timesheets. This system will prepare and issue invoices and receive payments on your behalf. They will also chase late payments for you.
Limited Company
You may decide to register as a limited company. This will give you protection from being responsible for any business debts in the case of bankruptcy. Again, a qualified accountant is recommended to deal with your administrative and financial matters. Your business will need a named director to oversee the operation of the company. You will need a business bank account where all your business deposits and outgoings are processed.
Tips
As the owner of the business, you may wish to take control of your finances yourself. The following are a few tips to make life easier for you.
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