The new year is well and truly on its way and we hope you’ve had some great celebrations. Research shows that a lot of us make plans and goals, that we wish to achieve in the New Year. Most of us plan to get fit and more active, some plan to be more organised and save money and others plan to start up their own business and be their own boss. 

This is the best time to plan as the New Year brings a fresh start. We talk about the best tips that anyone would benefit from. Whether you’re starting up as a business, or have been running your business for many years, you need to plan and motivate yourself for what the year is to bring. 

What’s your business idea? Is there a gap in the market you can exploit? Or can you add an additional service to what you are offering? If you’re having difficulty, then involve friends and family to brainstorm some ideas. You never know, they may just add the final touch to your brilliant idea.

An essential part of your business, as mentioned before, is to have a plan. If you intend to apply for funding, then you’ll need a business plan. If you have an idea or thoughts, write it down. As written ideas are more likely to be achieved than ideas still in your head. 

Check out this free business plan template from https://www.startuploans.co.uk/business-plan-template/ to give you a start. 

You should have a separate business bank account from your personal. This will ensure that all your incomings and outgoings are spot on when submitting your tax return. As under declaring can give you a nasty surprise in the future. We see a lot of clients who mix their business expenses and income in with their personal expenses. Separating personal and business banks will make things a lot clearer and a lot of help for your accountant too!

Another tip we strongly recommend is to keep documents of purchases. You can’t claim for expenses if you don’t have the documents. We see it way too often, a brand-new piece of machinery bought for business, but when it comes to doing the tax return, the document is nowhere to be found. 

Create a folder where you can store your documents straight away or maybe plan a day in the week which you will do your filing. If you don’t like paper, then you can always store your documents electronically online. Xero accounts software allows you to directly scan documents from an email if you prefer.   

Whichever route you choose HMRC do always spot check small businesses, so be a step ahead and organise your records.

The most important tip is to always strive for that customer service excellence. Keeping your customer happy will help you grow and prosper. These will help improve your business as word of mouth is a powerful tool.    

Pass that great skill onto your staff too as if they see you are great with your customers, they will follow suit.  It doesn’t have to be you doing everything.  Quite offset we see the staff being one of the greatest assets in maintaining customer loyalty in the long term.

There are training events and funding available for support and guidance, click here https://businesswales.gov.wales/ to find out more. 

Welcome to our latest blog. Christmas is around the corner and it’s our favourite time of the year here at Cross Accounting. It’s the time of giving and is there any other way to give your business a boost a grant to get your finance in place.

 

A business or an individual will be given a sum of money for a specific project or purpose. A grant usually covers only partial costs involved. Grants are given depending on your business activity, the amount of jobs that will be created due to this investment or if you are in a specific industry sector. Sometimes grants are linked to geographic areas. Such as those areas in need of an economic transformation.

 

Business Wales can support in finance, take a look at their finance locator to see if grants and other finance your business may be eligible for at https://businesswales.gov.wales/zones/business-finance/funding-search-tool-form

 

You should ensure that you meet the requirements of the scheme before applying for grants and finance. You’ll have to ensure you are ready to put up some of your own money as grants only cover partial costs. You’ll also need to have a detailed description of your project or purpose and a work plan with full costings. We can assist with a budget and full detailed cashflow to secure the finance you need.

 

The application process for grants can sometimes be time consuming and there usually is a lot of competition but on the plus side, most grants don’t have to be paid repaid giving your business that extra boost.

 

If you’re looking for that push to reach some New Years goals, the Development Bank of Wales can support to get the finance your business needs to succeed. Visit https://developmentbank.wales/ to get you ready for the New Year.

 

You will need to have a polished business plan at the ready.  If you would like us to look at your business plan, then you can book in for a free one-hour consultation where we can discuss how to start the New Year strong. Visit our website on www.crossaccountingservice.co.uk or call us on 02920 653 995. We wish you all a Merry Christmas and a prosperous New Year.

Improving your credit score

We are seeing an increasing number of our clients looking for mortgages and loans with their banks. It’s a good thing because it means that our client base is looking ahead at moving home, moving up the ladder by getting a more expensive house, or expanding their businesses.

As owners/directors of a business, your business and personal lives cross over, so these tips to get that dream house or expanding your business to meet your strategic goals will be similar.

The banks and finance houses look at a number of things when deciding whether to loan you money.

Can you pay it back ?

Do you meet their risk assessment criteria ?

What assets do you own ?

As a soletrader or Director of a Limited company your accounts to a bank are just as important as the personal income you are taking from the business.

They generally look at three years accounts, wanting to see that not only is the director taking an income, there is a defined growth year on year, the director is not taking out the complete amount of disposable profit, and keeping the balance sheet positive. This also needs to show year on year growth.

There are two main figures which are of high importance on a balance sheet ive discussed previously, the Net Current Assets, which is an indication of working capital, or cash in the business. The other figure is the overall total balance sheet value, this again needs to be positive.

The more money you wish to borrow the stronger the balance sheet and directors income needs to be.

This is not an overnight task but needs to be planned ahead over a period of time, but by putting in some self restraint and leaving funds or assets in the business you are over time improving your credit score.

Another scoring technique the bank uses is the amount of credit the company is taking and asking for. Whether is through credit with suppliers, a credit card, or a short term loan, ie overdraft. The bank will be checking your records demonstrating that you are being given credit by 3rd parties and are paying it back on time and within the terms of those agreements.

We have a number of clients who have been able to self sustain their businesses by not needing to apply for credit. This will unfortunately go against you if you are looking to expand. You need to be applying for credit every so often so that your credit history is gaining information. Even if you don’t need the money, and don’t want to pay any interest. You can apply for a credit card and just make sure you pay it off at the end of the month, you are naturally improving your credit score just by applying for the credit.

If you have an overdraft already in place its worth having a meeting with your bank manager keeping them informed of your plans for the future. We as a business put it into our routine to have a meeting every six months. As a company did this recently not only did the bank provide us with a larger overdraft than we had originally asked for, but as we had built up a good credit score, and were considered low risk to them they reduced the interest rate voluntarily by half for a much larger credit facility. It is definitely worth staying in touch with your bank manager.

Your own operational processes within the business. If you are giving credit to customers, make sure you are keeping on top of chasing the debt. Keeping your cash inflows at regular intervals this means to a bank that you are very active and have good controls in place, making you low risk to them. Next time youre reading your bank statement take a look and check not only the value of the cash inflows but the number of transactions. Frequent transaction is gold dust to a bank you are demonstrating large activity.

The cash outflows, if you are using an overdraft be sure to come out of the overdraft and into positive at least once a month. And never go over the overdraft. You will be penalised badly by the bank for doing so and can even have a much needed resource taken away. Remember an overdraft is very short term, it can be recalled and cancelled at anytime. I hope you find this article useful and use it a planning tool for your future, both personal and professional.

 

 

 

 

This blog is intended for information purposes only and is only advice from past experience, you may have other suggestions of your own. It is not intended to be used to make all of your business decisions but as a guide only.