Save money and hassle struggling with small business finance

If you run a small business, you’ll know how busy things can get. And how easy it is to let the administration side of things slide. But where tax and VAT are concerned, it’s best to bite the bullet rather than letting your paperwork slip into a state of chaos.

When you submit your tax accounts in good time your accountant can tell you more or less straight away, in April, what your June and January tax payments will be, which leaves time to save up or make other arrangements instead of panicking, stuck with trying to find thousands of pounds out of the blue.

If you submit your records in the form of a box full of tatty receipts you’re paying your accountant, who is a well qualified expert, to do simple stuff. It’s easy to create an income and outgoings spreadsheet. And it’s much better – and cheaper – to get your act together in advance and present your accountant with  a completed spreadsheet so he or she can just plop your numbers into the HMRC self assessment form online. It’ll cost you a lot less in fees, and you’ll also get an accurate, instinctive feel for exactly how your business works from a financial perspective.

I find the best way to stay on the straight and narrow financial track is to set aside an hour at the end of every working week to collect together the week’s receipts, expenses and incoming dosh, sort them into piles, plug ‘em into Excel (or whatever), and do my invoicing.

If you delay invoicing or do it only once a month you can easily run into cash flow problems and end up in real trouble. Invoice regularly, after every project or sale is complete, and you’ll always have a steady stream of cash coming in.

I tend to reject customers who turn out to be bad payers, because hassling them for the money they owe is stressful and annoying. It’s good to make it 100% clear on your invoice that you expect payment within seven, fourteen or thirty days. Invoice customers on any payment terms you like – it’s up to you, there’s no golden rule. And thee’s no reason why you can’t ‘sack’ a customer if all they give you is financial grief. You’re in charge!

Us Brits hate talking about money and our credit control skills are, on the whole, lamentable! If the thought of chasing late payments gives you the horrors, set up a basic reminder system:

  • remind by email as soon as your invoice period is up
  • remind again by email 3 days later
  • send a firm yet polite letter by post after 2 weeks – some people respond best to phone calls, others only get their collective fingers out when they’re reminded in writing!
  • finally, call them to issue a polite, friendly final reminder if you don’t get any joy
  • if that doesn’t work, and they owe you enough, it may be time to bring in a professional credit controller. Otherwise put it down to experience and refuse to work with them again!

(Thanks to for the great free image)