Category: Financial Planning & Accounts
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Pension planning for the self-employed
A pension gives you a retirement income, paid for by investments built up during your working life. The state pension is funded by your National Insurance contributions but only provides a basic income. You may need another pension in order to retire comfortably. If you are self-employed, you will not qualify for the additional state pension (also known as the state second pension).…
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Investment appraisal techniques
Investment is a key part of building your business. New assets such as machinery can boost productivity, cut costs and give you a competitive edge. Investments in product development, research and development, expertise and new markets can open up exciting growth opportunities. At the same time, you need to avoid overstretching limited financial resources or…
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Business budgeting
It’s essential to plan and tightly manage your business’ financial performance. Creating a budgeting process is the most effective way to keep your business – and its finances – on track. This guide outlines the importance of budgeting as part of your business planning, and explains how to go about this. It suggests action points…
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Choose and work with an accountant
Accountants can offer your business a range of services, from basic bookkeeping to specialist business advice. You may employ an accountant to prepare financial statements for your end-of-year tax return or for other services, such as auditing. By law, your business accounts must be audited each year, although some small companies are exempt – eg…
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Set up a simple profit and loss account for your business
A profit and loss account is a summary of business transactions for a given period – normally 12 months. By deducting total expenditure from total income, it shows on the ‘bottom line‘ whether your business made a profit or loss at the end of that period. A profit and loss account is produced primarily for…
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Avoid the problems of overtrading
Overtrading is an imbalance between the work that a business takes on and its capacity to do the work. It happens when a business takes on work, but does not have enough current assets, or working capital, to meet the resulting demands. This is particularly common in young, rapidly expanding businesses. It can be extremely…
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Set up a basic record-keeping system
Whatever kind of business you run, you are required by law to keep financial records relating to it. There are a number of business benefits to be gained from keeping accurate and up-to-date records. It saves you time, and therefore money, whenever you need to produce financial reports. You can be confident that you’re only paying the…
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Advice for seasonal businesses
Many businesses – such as those in the farming or tourist sectors and retailers selling Christmas merchandise – do the majority of their trading during a short period each year. The challenges faced by seasonal businesses are unique. This guide outlines a range of advice for seasonal businesses starting with cashflow planning, which is particularly important…
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Balance sheets: the basics
Your balance sheet is a financial statement at a given point in time. It provides a snapshot summary of what your business owns or is owed – assets – and what it owes – liabilities – at a particular date. The balance sheet therefore shows how your business is being funded and how you are…