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Know your Cash Flow

Every business owner needs cash and most are acutely aware of it, especially in the early years.

You may have to juggle wages, VAT bills, personal or company tax bills and chase late payers to get the cash you’re owed. You may be paying from personal savings to start up the business of your dreams and all cash does is flow outwards. Whatever your situation, Cash is still King.

Not only have you become a bank account watcher, someone who builds and stares at an excel spreadsheet, that soon takes on a life of its own but you may annoy your precious customers by actually daring to ask them to pay on time, and that leads to anxiety about repeat business or a damaged business relationship. You know you’re experiencing cash flow stress and it is not a good feeling.

Could you pay less VAT?

As a small business owner cash flow anxiety certainly makes you aware that you are human. All the emotions are yours and yours alone, and the person who has to take the action, is you as well. As an Accountant to small business humans it’s the emotional side of the cash flow anxiety that I see doing more damage than just taking the shine off your lovely business.

The thing about cash that you sometimes miss, is that it’s as essential to know the Flow as it is the amounts to go in or out. It’s the timing that matters – that is the Flow. Software and Apps that help manage the cash and its flow can be life savers to you and your business and as much as you love Excel, and I do too, you can reduce more stress by using the right tools for the right job. Here are 6 Tips to help you go with the Flow of your business.

Tip 1 – Use cloud accounting software Xero or Quick Books Online are best. They are the market leaders and match up to each other in functionality – if one launches something the other develops it too – this is all in your best interest as the owner of a small business that needs cash to develop itself.

Move from Sage to Xero

Tip 2 – Get good Cash Flow software that adds on seamlessly to you accounting software. That means everything in the accounts is automatically put into the cash flow. No more worries about spreadsheet formulas, or forgetting something. It also means you can review reliable data and add in forecasts going forward. So if your bad payer says they will pay you in 90 days instead of 30 you can accurately plan for that, and follow up to make sure it comes in.

Tip 3 – Share your accounts and cash flow software with your adviser or Accountant. The best thing you can add to Xero or QuickBooks is an Accountant. They can check over what you’ve got – you always have to input the sales forecast – and they know when you should, or may have to, pay HMRC tax, salaries, loans, get a VAT repayment etc. Remember the key payment dates for PAYE, corporation tax and VAT. Your adviser can forecast your VAT payments based on your sales forecast and you get to see your business in cash terms instead of profit or loss terms.

Tip 4 – Cash Flow software like Float will give youscenario planning as well. You can look at “what if” scenarios, like what if I took on a new staff member, what if I bought new technology or what if I paid myself more money.

 

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Tip 5 – Reliable software will let you see the Flow. This means you can see the cash crunches coming. You can ask the bank for an overdraft facility, you can show any financers that you have tight internal controls over cash management, and your stress levels will reduce because the sense of reliable control will also increase.

Tip 6 – Open a separate bank account to transfer cash reserves. This helps you save the cash for tax bills, save to repay investors or for new items you want to buy.

Taking control of the Cash Flow will help you take control of your wellbeing.

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Blog written by Carolinecaroline connor FCMA

 

 

 

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3 Good reasons for Salons and Spas to switch to a Cloud Accountant

 

3 Good reasons for Salons & Spas to switch to a cloud accountant

In the fast changing business of hair and beauty there is always something new to consider. Whether it’s new products, new markets or new salon technology there are a constant stream of ideas and inspiration for salon owners to buy to improve the salon experience for clients.

salon accountants

 

As a Salon owner you want clients to love you enough to return time and time again, but you also need to keep an eye on cash flow and profits. One of the secrets behind the most successful Salons is the trusted adviser who can help you grow the business – your Accountant.

As Salon accounting specialists, here’s our top 3 reasons why you should consider switching to a cloud accountant.

The Style Makeover

With a cloud Accountant you have someone never more than a few mouse clicks away from your business accounts. It’s like having your own Finance Director, but without the high costs. You get a can-do attitude, tax tips, advice, cloud solutions recommended and salon expertise too.

  • Tip 1 – Get a beautiful foundation

Having a good understanding of your business numbers is what keeps your business growing. Do you know your current gross profit? Do you know why you might need to monitor it? We know that running a beauty or hair salon keeps you mega busy, so anything that makes financial management easier for you is a big plus. That’s where clous accounting software comes in – use Xero or QuickBooks Online.

Accounting software ,plus an Accountant who knows about your type of business takes the hard work out of Salon accounting. Cloud accounting software takes care of the cash visibility, the sales data, your contacts, invoices and much more, giving you time to get back to keeping your clients happy in the salon.

Using a specialist Accountant means you get accounts, payroll, tax and VAT advice as standard, plus the knowledge of how to integrate your business systems – saving to tax and time.

makeup1

  • Tip 2 – Top add-on treatments to save you time

The beauty of having Xero (or maybe QuickBooks Online) as your accounting system means you can add-on any of over 500 Xero Add-ons that integrate seamlessly into your accounts. With our help you can create a tailor made process flow that works for your salon or spa business. So you get to manage appointments, take card payments, analyse data reports, profits and customer loyalty.

You can then scale up as you need to, maybe add an on-line shop or product stock control as well.

  • Tip 3 – Cash Flow

Don’t be killed off because of problems with cash flow. The beauty of having your business accounts in the cloud is that you have access to up to date information any time. With your bank accounts linked to your accounts you have an up to date view of cash in from your card provider, or POS terminal, and you can see what’s due to be paid out to suppliers, salon rent or salon staff, by looking at your dashboard. You will feel invigorated by the new level of financial control.

beauty & hair salons

Want to know more?

Finally, here’s a suggestion of how you might want to structure your Hair Salon, Beauty Salon or Spa business in the cloud. This will work for a start-up or a bigger Salon or Spa.

Save time, maximise profitability, minimise tax and secure repeat bookings with Timely, Vend, Xero, iZettle and us.

Give us a call on 01603 516 304 or request free updates from us here.

timely Appointment software

Timely is easy to use appointment scheduling software that integrates with Xero. We recommend this to all salons and spas who have accounts on Xero. Data can be extracted from other salon systems, but to maximise workflow or if you work alone, get the free trial from Timely.

XeroAccounting software

Xero is the number one, easy to use online accounting software for UK small businesses. Shaper Accountants are Xero Partners, integrators & trainers. But, if you love Quick Books Online we can find you a solution too.

izettle

Mobile card payment solution

Take card payments on the go if you offer a mobile service or in Salon using your iPhone, iPad or Android with iZettle. We’ve had positive feedback from clients using iZettle.

vendPOS (Point Of Sale) software

Vend is a popular web-based POS & inventory management software.

You can follow us on Twitter @shaperaccountants.co.ukaccounts

caroline connor FCMABlog post written by  Caroline who helps many salon owners on their journey to success. Attributes – loves identifying your repeat business, your top clients, your gross profit and finding out your most profitable services. Best advice? Start small with low costs but have your ultimate Spa or Salon solution in mind.