In the United Kingdom, small and medium-sized enterprises are booming – as evidenced by the growing number of these types of enterprises, particularly since the advent of the recession – a time when individuals were basically forced to fend for themselves and do things on their own.
But although having your own business is quite exciting in itself, you should still be aware of the many fundamentals when setting up your own enterprise. These fundamentals include learning how to manage your finances and accounts and making sure that all your numbers are done right.
What you should know about the importance of proper bookkeeping
Even if you see yourself as a small business enterprise, bookkeeping is a necessary task. You can choose to do your bookkeeping manually, or you can choose to do it with the use of accounting software programmes (most of which you can find online). So when it comes down to it, what exactly is bookkeeping? Simply put, bookkeeping is making sure that all your records, invoices, expenses, and other outgoings and income are all precisely noted and written down. With up-to-date records of your finances, you should be able to stay on top of your accounts and even predict (and deal with) any potential financial issues even before they arise.
Don’t neglect your yearly accounting report
If you have a business, you should make it a point to produce a formal report of your business performance (especially when it comes to the financial aspects) at the end of the year. The format of this annual report should be consistent, and it should also include relevant details such as sales, expenses and costs, assets, and any debts and the amounts owed. Keep in mind that the date for submitting this yearly report will be based on whether you are a limited company or a sole proprietor or trader.
You can choose when you would like your accounting or financial year to run, but since a sole proprietor or trader’s calculations for income which is taxable runs from the 6th of April to the 5th of April, then it makes complete sense for you (if you are a sole proprietor or partnership) to choose an accounting or financial year which extends from the 1st of April to the 31st of March. If you are a limited company, you have the full freedom to choose the most ideal accounting or financial year according to your preference; however, you are still required to file and submit your accounts to Companies House annually.
What you should know about tax returns
Again, if you are a limited company in the UK, you need to pay corporation tax. The corporation tax return should be completed not more than 9 months following the end of your company’s accounting period. You should also make it a point to compute, fill in, and file your tax returns for your personal income tax for the period of 6th April to 5th April of every year. The tax return form for your personal income should be filed (and taxes paid) on or before the 31st January following the tax year in question.
If you are having difficulties managing your accounts and making sure all your financial records are kept up-to-date, you can always enlist the services of accountants in central London like GSM & Co. These accountants in central London provide a plethora of invaluable services, including accounts preparation, business tax advice, estate planning, payroll services, and a lot more.