Welcome back to the 4th installment of my Simple Guide to Business Accounts, if you've only just joined you can catch the other 3 parts here...
This week we are checking out those figures...
Check out Those Figures!
How are your figures looking? Good? Bad? No idea?
Right, let's get that last one sorted straight away! Go get you completed monthly summary sheet.....
Got it? Good! Now add up all of the monthly income figures. That's your Total Yearly Income (A). Write that figure down.
Now add up all of the monthly expense figures. That's you Total Yearly Expenses (B). Write that figure down too!
Now to find out how you did last year (your overall income) (C), you need to take your expenses away from your income. ( A - B= C )
Go do that now....
Example 1.
you made £2543 total yearly income (A)
you spent £1756 total expenses during the year (B)
A- B = £787
You made £787 PROFIT last year
Example 2.
You made £907 total yearly income (A)
you spent £1578 total expenses during the year (B)
A - B = -£671
You made a £671 LOSS last year
......Ok so what figure did you get?
You made a profit?
Wow! Well done, not everyone does, keep up what you're doing! Skip down to What to do Next....
Your figures show you made a loss?
Don't panic! Not everyone will make a profit straight away. Infact the first year is one of the worst!
You've just splashed out on loads of new equipment, you're probably not as efficient as you will be in years to come, you're maybe wasting materials & time trying out new ideas, that you won't sell. Give yourself a break, you're still going and that's the main thing.
What you can do is use the figures we prepared to go back over last years purchases and see where your money went. What areas are you spending the most money on, how can you trim those expenses?
What to do Next!
You now have the figures to fill out your tax return. Read through the paperwork and if you understand it all, and your situation is straight forward go ahead and fill it out! File all your paperwork for the year in a folder somewhere safe (you'll need to keep these for 7 years).
If you're not confident with the forms or you have another job etc you might prefer to have an accountant look over your accounts for you and fill out the form. The good news here is you've done all the legwork preparing your figures so you'll save money!
And that' it your accounts done! Phew! We did it, wasn't too bad was it?
And that' it your accounts done! Phew! We did it, wasn't too bad was it?
I hope you've enjoyed this series of Easy Guides, if you'd like to recieve more guides for small businesses, sign up below...
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