Without cash you cannot pay your bills and not being able to pay your bills will inevitably lead to company failure.
Understanding when cash is coming in and consequently required to go out to pay for bills is crucial to keeping your company alive.
You need to keep track of who owes you money, and who you owe money to. Laying the proper groundwork will prepare you for managing cash flow efficiently and effectively, including systems for:
Budgeting is probably the most difficult for startups businesses. Why? Normally budgets are set with pre-existing knowledge and performance in mind. So, if you are in your first year of trading, there may be a lot of guess work involved.
Our advice however is to budget realistically and based on what you genuinely believe performance will be.
You should consider all revenue and expense accounts including taxes when you budget to make sure you have a clear picture of your business.
Make sure you claim all your allowable expenses, and that you include all relevant information in your annual tax return.
Budgets are great for monitoring your company’s performance in your management accounts.
If starting up your business requires that you employ staff, then this is a whole other area where you need to stay on top of your accounts.
You’ll have certain obligations regarding payroll and pensions, including National Insurance contributions and auto-enrolment.
This is yet another administrative burden, but it’s one you can easily lighten if you outsource your accounting.
The VAT threshold is £85,000, at which point you must register for VAT. But are there tax advantages for startups if they register for VAT anyway?
It all depends on where your business is at currently, and where you see it going. An accountant can offer you a fresh, impartial perspective to give you the clarity you need.
Unit economics form the business blocks of your business and they cover:
The lifetime value (LTV) of your customer should be more than the customer acquisition cost (CAC) associated with them. This is what makes your business profitable.
Once you start trading, unit economics become your bread and butter – they’re essential to how your run your business and the decisions you make.
A key to successful business growth is knowing when to bring in the help you need. You know your business and what you want to achieve. Let us take care of the numbers and support you in your strategy.
We offer a range of cost-effective, specialist services to startups and SMEs, drawing on dedicated cloud accounting software and years of professional accounting experience.
Operating from our London head office, Venn Accounts a traditional accounting firm. We are committed to ensuring all our clients are completely clear about what we can do for them, while fully supporting them every step of the way.
Contact us and speak to a member of our team about our annual account service.
