Small businesses are on the rise – and that’s a great thing, because it’s the small businesses in the country that make the country great. More and more people are becoming self-employed – which means more and more people are creating a sturdy backbone to the country.
However, setting up your accounts (even as a small business owner) is not always that easy, and it’s important to do it the right way. Not only is proper accounting an invaluable decision-making tool, it’s also required by law to have it done the correct way. Though it can get complicated at times, there’s certainly no need to panic or feel overwhelmed by the way bookkeeping and accounting procedures should be handled. Here’s how best to manage the accounts of your small business.
Start with good bookkeeping
It’s not the easiest of tasks – expenses and income need to be categorised in certain ways and this takes some practice and training to get right. However, once you get used to it and once you start having proper bookkeeping practices implemented, you’ll find your company in a much better position, and your management will be able to make much more informed decisions.
Creating your annual accounts
This is where the formal know-how of an accountant or other professional comes in, such as accountants central London at GSM & Co. – you need to present your annual statements in a formal and prescribed method so it is easily understood by other professionals (including those working for the government). It’s always best to have this done by a certified accountant (it will help with your taxes, as well).
You’re not going to escape it, so you should know what it’s all about. Here are some of the different kinds:
- Corporate tax – Currently the rate in the UK is 20% of an income up to £300,000 a year.
- Self-assessed income tax – This is calculated not on the income of the business but on your personal income.
- Tax rates – everyone has the availability of a tax-break up to £9,440, but above that the tax to pay depends on the amount earned and the bracket it falls in.
- VAT – it’s something to pay but something you are able to charge your customers for.
- PAYE – national insurance must be paid as well.
Bookkeeping should be quite easy – provided, of course, that you have a great system in place that classifies everything in its proper categories. Accounting, however, is a little more complicated because it requires understanding of the various laws that are in place – so it’s important that you find a person who is up-to-date with it all. Here’s the good news: it’s really not that complicated, and professional help is not necessarily expensive. Find the right accountant and your business will truly have a great edge.