The 6th April marks the beginning of the new tax year – a crucial time for entrepreneurs to plan and prepare for changes which are likely to impact upon future business growth. It’s a time of year which not only tends to get accountants excited, but it’s also a good time to assess how those changes in rules are likely to impact upon your business. From changes to the minimum wage to dividend allowances and even corporation tax rates, this is the time of year when the changes which have been discussed and planned come into effect. It may conjure up visions of advancing admin and seemingly endless expenses but at Finance For Enterprise we are committed to helping business owners plan ahead. Here are our top tips for sailing through the new tax year, rather than starting with splutter!
Tackle your tax
The Chancellor announced changes to the UK tax system during the budget, but April is the time when these changes typically take effect. Look out for ways in which this may affect your business. For company directors, dividend allowances will reduce to just £2,000 this year. Don’t forget to think about how changes to the minimum wage, pensions and even R&D tax credits may affect you. It pays to keep ahead of the changes in legislation, so if you haven’t already set up a meeting with your accountant, now is the time to start planning for the year ahead.
Get your invoicing in order
Cashflow is critical to every business, but it always surprises me when I speak to many SME owners that they don’t have a formal system for chasing unpaid invoices. If you don’t have a formal procedure for ensuring you receive payments on time, then now is a good time of year to start putting those measures into place. If you’re a new business owner and haven’t been trading for long, you may be unfamiliar with how to present and lay out an invoice, or even what to include. Beyond the obvious key features, such as your company logo and the amount owed, any invoices you send out should state payment terms and conditions.
Give your business a money MOT
Think about how your business has performed over the past twelve months. Do you have a healthy order book and a booming bank balance? Or are you facing sleepless nights worrying about how the next bill will paid? Take a step back and look critically at the performance of your business and where you would like it to be at the end of the year. Think about your business aims and what you need to do to achieve them – If you require additional finance to support growth plans, or require funds to cover a projected shortfall in finance, remember there are many different short-term lending options available. Even when the banks say no, organisations like Finance For Enterprise may be able to help.
Review your goals
Does your business have a business plan? When was the last time you looked at it? Think of it as a living, working document that is used to guide your business in the right direction. As your business evolves, your goals will change and your plan should help you to lay down the strategic aims and future growth plans. If you haven’t already started reviewing your business strategy, the start of the new tax year is a fitting time to start thinking about the future.
Review and set annual budgets
Investing some time in reviewing whether your budget works for you is a worthwhile exercise that can improve your economic prospects in the financial year ahead. Reading it through allows you to see what has worked and what hasn’t, highlighting areas of improvement and prompting a revision of your budget in line with future predictions. The best place to start in evaluating your budget is to look at the relationship between your income and expenditure. How have your outgoings differed from what your budget set out? Have you financially performed as predicted? Are overheads such as rent and stock set to increase over the next year? Answering such questions will give you the knowledge to reshape your budget so it fits your changing needs.
Settle any outstanding expenses
A recent YouGov survey revealed that the majority of small business owners don’t claim their expenses, citing the size of the amount as the main reason for this. Although the survey found that at least a third of small business expenses are less than £10, these amounts can soon add up. The new tax year is a good time to consider what you may be able to claim back. So, track down those train tickets, empty your wallet of receipts and make sure all employee expenses are logged. They may be small amounts here and there, but use the tax year as a way of getting on top of your paperwork – and remember, you may be missing out on the opportunity to factor these hidden expenses into your annual accounts. For more information on Enterprise Loans, visit the Finance for Enterprise website: http://finance-for-enterprise.co.uk/