Starting A Business – Finances

Starting A Business – The Financial Aspect

Budgeting – start up factsheet

Are you going to be in control of your new business? Will you know in advance about any looming cashflow problems? Unless you make use of properly prepared budgets, the answer is probably going to be no.
Budgeting sets out the financial targets for your business. It helps you anticipate problems and compare what has actually happened with what you expected.

This briefing explains:
How to budget for your expected sales and costs
How to forecast your cashflow
How to compare your actual sales and costs to budget, and how to update budgets

Choosing and using an accountant

Unless you happen to be an expert on accounting, tax and finance, you need an accountant.
As a specialist, an accountant should always be able to save a start-up business more in time and money than the cost of accountancy fees.
If you have not yet set up your business, talk to an accountant before you start.

This briefing explains:
What an accountant can do for you
How to find the right one
How to keep the fees down

Credit control – start up factsheet

Credit control is a vital part of running any business, and especially a new business with limited cash resources.
Every year, thousands of start-ups go bust. Many are profitable, but are owed money by their customers. Unable to pay their own suppliers, they are eventually forced to cease trading.

This briefing focuses on four key areas:
Deciding what credit to give a customer
Everyday credit control
Chasing debts
Coping with other companies’ bad habits

Financing your business

A solid financial base is essential when you are starting up a new business.
The right financing package will carry you through any temporary difficulties, yet still allow you to mak the most of growth opportunities when they arise.

This briefing focuses on four areas:
Deciding how much money you need
Investment finance
Different forms of borrowing
Other sources of help


Even experts can find it difficult to keep track of the hundreds of different grant schemes which keep appearing – and then disappearing.
This briefing will give you a good idea of whether your start-up is likely to be eligible for a grant – and whether such a grant is worth the effort involved in applying.

It covers:
Which business activities are most likely to qualify
Where in the UK additional aid is available
What criteria a project must meet
How to apply

Simple book-keeping

FactsheetBook-keeping makes your paperwork easier. It provides a system that tells you – and your accountant – exactly what is going on.

Whether you use a manual or computer-based system, the same principles apply. It is worth deciding if you are going to computerise your accounts at an early stage. While a traditional paper-based system will look suitable for many start-ups, the accounting function could soon swallow valuable time as your business starts to grow. If you start with computerised accounts, there will be no need to go through the timeconsuming process of transferring your paperwork onto a computer package.

This briefing covers:
How to record business income and payments
How to use your bank statement to check that you have not made any mistakes
Tips for cash businesses such as shops

Tax and NI – start up factsheet

Anyone starting up a small business needs at least a basic knowledge of tax. For the details, you must speak to a tax expert.
A genuine expert should be able to save you much more in tax than the cost of the fees, as well as sparing you communicateeffort, time and stress.

This briefing explains:
What taxes will affect your business
What can be claimed as business expenses
How to calculate National Insurance payments.
How to pay less tax


VAT (Value Added Tax) is tedious, but it cannot be ignored. Start-ups need to understand the basics, because most businesses will have no option about registering for VAT, as soon as their sales reach £56,000 a year.
If you are going to register, you will also have to cope with the paperwork and the deadlines.
Being efficient will minimise the time you spend on VAT. Mistakes or delays can lead to penalties.

This briefing explains:
How VAT works
Whether you need to register
How to charge and reclaim VAT
How to complete your VAT return