According to the accounting membership organisation AAT, SMEs are probably losing out on £1,277 a year because finances are being dealt with by unqualified staff. This equates to a massive loss of around £2.9billion a year across the UK. AAT estimates that 35% of people who are responsible for finances in their SME don’t have a relevant qualification, with finance and accountancy tasks being shared between staff for whom it is not a primary responsibility. In fact, only 26% of small businesses have one or more dedicated staff members dealing with the accounts.
Here are our Top 7 effective budgeting tips for small business owners.
1 Hire an accountant
Well we would say that wouldn’t we! But even if you’re thinking of using our services, there are steps you should take to make sure it’ll be a good investment. A good accountant won’t just do your tax returns, they’ll also help your business grow, so you need to find someone you can really trust as they’ll need to know everything about your company. Ask around – talk to other small business owners to find out who they use and whether they’d recommend them.
2 Be timely with your tax return
If, like many small businesses and sole traders, you leave it until the tax deadline to give your records to your accountant, it could leave you in the position of having a last minute tax bill you can’t afford. If you sort out your tax return nice and early, you’ll know exactly how much you’ve got to pay when there’s still lots of time to get the money together… without incurring added fees or penalties.
3 Don’t waste your energy
Energy bills will be one of your company’s largest expenses, so are there ways you could save money by using less energy? Shop around the utilities companies to see if any could offer you a better deal. And get your staff involved in identifying ways of saving energy and encouraging them to switch off lights and equipment when it’s not in use.
4 Get appy
There are a lot of accounting programmes and apps to help make budgeting easier and less boring. Check out our blog on some of the most popular to see out which one might work best for you.
5 Bank charges
Review the service you’re getting from your bank, especially when it comes to bank charges. Find out what the other banks are charging as you might find you can get a better deal. If you are thinking of changing banks, take into account what your business might need in the future (e.g. a loan or insurance).
6 Keep on top of your budget
If you keep your records up-to-date and accurate, you can use your budget as a planning tool. By working out what your expenses are, you can get a much better idea of the revenue you’ll need to aim for.
