accountants / 66 posts found
6 Reasons To Look at Your Financial Reports
Making time to look over your financial reports each month is an important task for any business owner. If you are not taking the time to do this, either because you’re too busy, or perhaps you don’t really understand what you’re looking at and it doesn’t make sense to you, then here are 6 reasons we recommend that you should start to. But before we get our 6 reasons, let’s talk very quickly about which reports to look at. At a bare minimum, and depending on the complexity of your business, you should be looking at the following: The Profit [...]
Increasing stock turn in a slow-moving economy
If you sell stock or inventory, it’s essential you understand stock turn and how to increase it. Obsolete, or ‘dead’ stock will harm your cashflow and your ability to increase profit, particularly in a slower-moving economy. The longer stock takes to sell, the longer you have your cash tied up in the stock before it can be sold for a profit. The older the stock, the less likely it is that you’ll be able to sell it for its original retail price. Use the below formulas to calculate your stock turn: Stock turn = cost of sales / average stock [...]
Understanding your working capital to maintain business success
If cashflow is the lifeblood of your business, then working capital is the health check you should regularly undertake to keep your business alive. Regularly checking working capital will play an essential part in maintaining business success during these times of greater economic insecurity.
Create a one-page business plan
To make a success of your business, you’re going to need a robust business plan - particularly as we face challenging times. With a one-page business plan behind you, the company has a real sense of strategic direction and a set of core goals to refer to and track against. But what are the key elements to include in your one-pager business plan? We’ve listed some of the foundational areas to cover, so there’s real purpose behind your return to trading. What to include in your business plan Lots of online resources will suggest that a business plan is an [...]
8K – The Valuation See-Saw
Week four – the Valuation See-Saw ‘Cash is king’, or so they say. And they’d be right! Nobody wants to worry about the bills that are coming out, so ensuring that you have cash in your business account can really help reduce some of the stress. It can also cut down on interest if you find yourself regularly taking out loans. Getting a better grip on your cashflow can be a tricky process, and it often involves a lot of moving pieces. But consider the following if you’re running into trouble: Renegotiating your supplier terms to pay later, and your [...]
8K – The Switzerland Structure
Week 3 of the 8 Key Drivers of Business Value: The Switzerland Structure A business' value requires that the business not be overly reliant on any one customer, employee or supplier. This is quite a big subject, so this is just a quick overview. Post a comment if you’d like anything expanded upon. How can we get more independence? With customers, the danger point is around 15% of sales. The simple answer is to get more customers – but it’s never that simple in reality. You can also have a look at any low-margin products you’re selling and dropping them. [...]
8K – Growth Potential
We’ve hit week two on the 8 Key Drivers of Business Value! It’s easy to think about what you have achieved in your business over its lifetime. Whether it’s awards, or an outstanding reputation or how many years you’ve been operating. None of this really helps in terms of the potential for growth your business has. A few things you should be thinking about: Can you cross-sell or upsell any of your products? Ensuring good client-facing systems are in place can automate much of this process and make a big difference to your business. Are there any complimentary products you [...]
8K – Financial Performance
Today is the first day of our series on the 8 Key Drivers of Business Value Whether you’re growing your business for yourself, for the next generation, or to sell it, you need to ensure you have these drivers up to scratch. One weak area can seriously reduce your chances of hitting your goals for your business and your life. Our first stop is straightforward – Financial Performance. Here are a couple of things to think about to help you get it right: Are you getting the best possible prices from your key suppliers? Do you have any negotiating room? [...]
Green light for pension dashboards
The government has given the green light to allow pension providers to create user-friendly services that display pension information for individuals on-line. Savers will be in the driving seat with all the facts and figures about their pensions and potential retirement income at their fingertips in one place for the first time - on smartphones, tablets and computers. Work and Pensions Secretary Amber Rudd said: With record numbers saving for retirement as a result of our revolutionary reforms, it’s more important than ever that people understand their pensions and prepare for financial security in later life. [...]
Tax-free property and trading allowances
Since April 2017, you can earn £1,000 from a trading activity and £1,000 of property related income, without being liable to income tax. These tax-free allowances on property and trading income are useful as families can generate an extra £2,000 a year of income without increasing their tax bills. Obviously, these small amounts will not be a replacement for your day-job, but they do contribute to financing your monthly bills. What property income could this cover? You could rent out: your drive as a parking space if you live in an area where parking spaces are at a premium, [...]