NEIL’S A to Z OF ACCOUNTS AND BOOKKEEPING

Accounts – Financial accounts are legal requirements for HMRC (the Tax Man) and perhaps Companies House. They report history.

Management accounts are more immediate and should include forecasts. They should help predict your future.

Bookkeeping – the building blocks for your accounts. Crucially, they should correspond with the records from your bank. If they are up-to-date, then the information is valuable to help you to analyse the past, the present and the probable future.

Creditors – people to whom you owe money. They can sue if you do not pay.

Debtors – people who owe you money. You can sue if they do not pay.

Expansion – growing your enterprise is great when it works. Be sure you have finances in place before you commit.

Finances – sometimes you can borrow money to finance growth. The much preferred method is to use internally generated funds to build your business. Second best is to ‘factor’ your sales at a bank. This saves you having to wait for late paying customers.

Genius or Graft? – good ideas and hard work should lead to success.

High Tax? – this may be a sign of success. Check with your accountant to be sure to pay as little as possible (within the law). There are a number of legitimate methods of keeping the tax bill to a minimum with some advance planning.

Insurance – an important method of covering yourself against unnecessary risk.

Journal – accounting-speak for entries which record a business transaction in your business’s accounts.

Know your Onions – be sure to keep expanding your knowledge. If you find you have an idea which has commercial value, you need to register the Intellectual Property (IP). In the UK, you can use Copyright or Patent Law.

Law – you only need to be aware of your rights and duties. The details should be handled by your accountant or your lawyer.

Mighty Oaks from Little Acorns Grow – a corny expression which should apply to your business…

Nothing Ventured, Nothing Gained – yes, but how to get the right balance? Always write down the pros and cons before you make your choice.

Obligations – in business, you will find that you both owe money (to creditors) and are contracted to deliver your promises, and support your staff.

Premises – you will need somewhere to work and regroup. It may be good to move away from home for work. This will be a major milestone in the growth of your business.

Quibbling – remember, customers are necessary, but frequently awkward! Even when they split hairs, choose to be nit-pickers, and drive you to distraction, they do provide your bread and butter…

Recipe – there are volumes of advice on how to grow your business. You will need to choose your own formula for success.

Support – the assistance of an accountant and/or business coach can pave the way to success.

Trajectory – ever upwards, from a corner at home, to your own office with a few staff (and payroll), to developing a business that will have to be registered for VAT. You should then devise a strategy to enable you to eventually exit the business, and sail off into the sun.

Understanding – a life-partner is, of course, a great asset to help survive the ups and downs.

Value Added Tax (VAT) – a neat government trick where the government requires you to collect and handover a business tax.

Weather – the things that you cannot control or predict. However, you can invest in both an umbrella and a sunshade!

X-Ray – with the right vision you can see threats and opportunities before they arrive. Appropriate action should then be obvious.

Yesterday – it’s gone. Learn lessons and move on.

Zealous – We are on your side! Talk to your friendly enthusiasts at Another Answer Accounts and Bookkeeping.

If you  would like to speak to our award-winning accountants and bookkeepers based in Buckinghamshire, then please do contact us.