Telegraph article about SME financial management
How to better manage your small business's money
Awork of art is not something that people pick up on their way home from the office, so Katie Henry of online dealer, Art in Offices, expects there to be peaks and troughs in sales.
It does, however, mean that she must meticulously plan her finances. “We never want to go into our overdraft, because of the charges incurred,” she says. “Besides, it doesn't look good to our partners or the tax man.”
The company’s VAT bill is one of the director’s top priorities, because if it’s not considered, it creates the illusion of having lots of money in the bank, before a chunk of it suddenly disappears.
“Accounting software is good for helping you plan to pay your VAT bill,” says Ms Henry, who uses Xero. While the tool is a £32 monthly expense, it saves a lot of time for her accountant, so reduces their bill. It’s also worth doing the same for PAYE, National Insurance and other staff taxes, she adds.
Good financial management is about the little things, explains the director, so in your day-to-day dealings, remember that every penny counts. “Take public transport to meetings instead of taxis; call up trade shows ahead of time to ask for some free tickets for clients; and it doesn’t hurt to find a bar with a happy hour when you take people for drinks.”