finance

Small Businesses Spend Just 3.6 Hours A Month On Finance

Small Businesses Spend Just 3.6 Hours A Month On Finance

UK small businesses are seriously underestimating the importance of financial management by spending just 3.6 hours on the matter each month – according to a report by KashFlow. The survey of small firms with less than ten employees revealed that while the process of managing money is a stressful one for a significant number of respondents – a strong majority remain confident in their ability to keep on top of things. Indeed, 87% of those surveyed described their bookkeeping as either ‘really good’ or ‘not bad’, with just 6% admitting they were “not good”. Despite their confidence however, 32% of small firms still suffer from the strain and pressure of financial compliance – a strong indicator businesses should allocate a lot more time to financial management. Oliver Shaw, CEO of KashFlow,... »

What Is a Profit and Loss Account?

What Is a Profit and Loss Account?

A profit and loss account details your business transactions, subtracting the total outgoings from the total income to tell you how much, if any, profit you have made. Your profit and loss sheet, unlike a balance sheet, displays the financial health of your company for a period of time – a month, a quarter or a year. A balance sheet only represents your finances at a particular moment in time. If your company is incorporated, you are required by law to produce a profit and loss sheet for each financial year. If your business is not trading as a limited company you don’t have to produce one, but producing a profit and loss statement is nevertheless useful to determine how your business is performing at a glance. What goes into your P&L account? 1. Gross income (the total of all money th... »

Small Businesses Losing Money Due to Inefficient Petty Cash Systems

Small Businesses Losing Money Due to Inefficient Petty Cash Systems

On average, UK small businesses lose £355 a year due to insufficient petty cash systems, with 43% admitting that the biggest barrier to effectively monitoring petty cashflow was misplaced receipts. Worryingly the research, conducted by Argos for Business, found that 15% of employees did not know how the petty cash system worked at their small business employer, with 37% believing it was the responsibility of the finance department and 15% blaming line managers for misplaced cash. Complicated processes was the second biggest obstacle to the effective management of petty cash at 12%, and healthcare and retail were the largest sectors affected by the issue, with 17% and 12% respectively. Danny Clenaghan, managing director at Argos for Business, said: “While petty cash is often considered a sm... »

Small and Medium Firms Raise over £1bn in Investment through EIS tax incentive scheme

More than a thousand start-ups obtain finance through the Seed Enterprise Investment Scheme The government’s Enterprise Investment Scheme (EIS), which launched in 1993 but was revised in 2012, has funded 2,400 small and mid-sized firms with investment totalling over £1bn, according to a new report. Additionally, EIS sister programme the Seed Enterprise Scheme (SEIS), which launched in 2012, has been found to have backed funding in 1,120 start-ups with investment totalling£83.7m altogether. In 2012 the government reformed EIS, enabling investors to fund larger businesses with more investment and to receive better tax breaks. The changes included increasing the maximum investment to £1m, eligibility to companies with staff numbers of up to 250 and revenues to £15m. Since the changes were int... »

A Third of Small Business Owners Find Workload “Exhausting”

62% business owners say running a business is a “a constant challenge” but many struggle to pass responsibility on to staff A new survey has revealed over a third of small business owners find running their own business “exhausting”, with 38% admitting that being an entrepreneur is harder than they had expected. The research, conducted by YouGov, found that although business owners are struggling with workloads – 62% of entrepreneurs find running a business a “constant challenge – they are failing to share the responsibilities with their staff. 37% of respondents stated that they struggled to leave employees in control to take time off and 56% worry that staff will make errors in their absence. The main areas of difficulty for small business owners were also revealed with 32% struggling wi... »

7 Ways to Improve Your Business Finances

7 Ways to Improve Your Business Finances

Small and mid-sized business bosses have to consider everything from how to cut carbon emissions to making the most of social media marketing; but keeping a close eye on financial matters should remain a very high priority and a cornerstone of how you build for the future. Here are some tips on how to improve your financial processes as a small business owner: Speed up your invoicing process Few small businesses can afford to see their invoices going unpaid for lengthy periods of time. The best and most reliable way of ensuring that you receive payments from clients in a shorter timeframe is by speeding up the process at your end of the equation. By systematically and routinely sending out invoices at the earliest opportunity, you will very likely see significant benefits in terms of how s... »

Small Businesses Losing £2.5bn Due to Cash Payments

Time and money lost by cash-taking small businesses is reducing profits by up to £942 a year A recent poll of 500 small businesses shows that the overhead costs in taking cash payments is amounting to £2.5bn because of the combined financial and time impact cash handling entails. The report revealed that 56% of small businesses take cash, with 10% only operating through cash and cheque – even though this is costing companies approximately £942 a year (the average small business’ takings for two days). The study showed that on average these companies spend 12 days counting cash and travelling to banks. Along with the bank charges that result from paying in cash at the bank, 32% of the cash-handling businesses employ at least two people to count cash regularly. Claire Aggarwal, owner of a mo... »

Number of Self-funded Small Businesses Jumps 18%

Report reveals that nearly half of small and mid-sized businesses are choosing to use their own savings to fund growth Research by Bibby Financial Services (BFS) discovered that the number of self-funded, or family and friend assisted, small businesses jumped 18% in the last six months. The number of companies relying on their own or family and friends’ savings has risen from 26% to 44%, making it the most popular form of funding among the group. The survey was conducted with 1,000 small and mid-sized businesses, of which many stated that they feel banks remain unwilling to lend to them. BFS’s chief executive officer, David Postings, believes that the sudden increase is a result of a newfound optimism with the economy’s growth; however he warns against self-financing for long-term, sustain... »

Bank Roadshows Help Small Businesses Access Finance

Business owners can find out how to make the strongest case for a loan, following the launch of a series of regional roadshows by the Business Finance Taskforce. The Better Business Finance initiative was originally announced in October 2010 by the taskforce, which is led by the British Bankers’ Association (BBA) and includes the main six high street banks. The initiative is part of its commitment to improve small businesses’ access to bank finance and advice. The first free “outreach event” took place in Sheffield this month, where local businesses took part in workshops and a panel discussion. Similar events are due to follow in all the UK’s major cities, listed on the Better Business Finance events page. BBA spokeswoman, Lesley McLeod, said that the initiative shows the banks’ support f... »

Cashflow Management

Cashflow Management: The Basics Introduction Cash is the oxygen that enables a small business to survive and prosper, and is the primary indicator of business health. While a business can survive for a short time without sales or profits, without cash it will die. For this reason the inflow and outflow of cash need careful monitoring and management. This guide looks at the key elements of cashflow and at how cashflow management will help protect the financial security of your business. It outlines the steps that you can take when dealing with your customers, suppliers and stakeholders to improve cashflow. It also highlights common cashflow problems and how to avoid them. Read on to find out: All About Cash – The difference between cash & profit and the fact that cash is king (cas... »

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