Recent research undertaken by cloud accounting software FreeAgent, says:
Many micro-businesses are totally overwhelmed by the burdens of tax and their accountancy obligations.
Also over 600,000 micro business owners are missing tax deadlines. If that’s you, do not panic. There is always help available.
The key factors that will lead you to be in this position are:
- Poor organisation
- Inadequate systems
- An inability to get your hands on your financial data – fast.
You will find your business life is far simpler if you bite the bullet and invest in good cloud accounting software. It does usually, mean a monthly fee, but it will save you time, worry and effort and pay back fast. Even the smallest business with few sales needs to keep good, accurate records of costs. The research found that 17% of those surveyed did not have immediate access to their accounting data. Stress and anxiety about your accounts are a key indicator that you need to get conventional systems in place – fast.
Organisation is key here, and no amount of paper lists and excel spreadsheets are going to serve you well. The more difficult your accounting system is for an accountant to handle – the more it’s likely to cost you to get it put right and turned into your annual accounts.
Nowadays there are several accounting software packages at affordable prices and they link to your business bank account. This is now mainstream for micros and small businesses – with creatives and start-ups leading the way. Although good, easy software with bank statement uploads can work for some – although this may become too slow for you, as your operation grows.
When it comes to tax returns, many business owners feel anxious. If your records are up to date, and on an accounting system, you can do a Self-Assessment Tax Return or even a Corporation Tax Return yourself – but most business owners will, at some point ask an accountant. There’s always the added concern that you may be missing out on tax relief, or you may not have claimed all that you can. Getting a HMRC fine for late filing can often add to the anxiety of not having your business accounts in order.
If you use software like Free Agent (aimed at the contractor or micro entity) or Xero (aimed at the micro/small & medium business) your accountant or bookkeeper can see and manage your data for you – making it far less painful to file your taxes and your annual accounts.
Many micro businesses are benefiting from the sheer power and joy of using accounting software and seeing their business on a dashboard – this is no longer the domain of the big players only. Affordable, accessible and free to trial – bring on the game changers and get control of your business – fast.
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