Retained Profit Advantages & Disadvantages
There are several advantages and disadvantages to using retained profit within a business. In this way you can assess for yourself, in the context of your own business, whether retained profits are the best way forward for you and your shareholders. In this practical guide, we explain the rules, pros and cons of retaining profit […]
Prepare a Cash Flow Forecast For Your Business
A cash flow forecast offers valuable information about your business’ expected future performance. By understanding how much cash the business is likely to have over a set period of time, you can make informed commercial decisions about investments, expansion or even determining the future viability of your company. In this guide for business owners, we […]
Bookkeeping for Small Businesses & Sole Traders
Bookkeeping plays a vital role in running your own business, especially when it comes to declaring any profit or loss in your annual tax return, and offsetting allowable expenses against your taxable income. The following guide for small business owners and sole traders looks at the importance of good bookkeeping and provides essential best practice […]
How to Prepare a Statement of Financial Position
Preparing a statement of financial position is just one of the many financial reports that will need to be regularly generated when running a limited company. It’s often best to secure professional advice and support to prepare these types of reports, although it can still be useful to understand the principles and purpose behind this […]
Directors Loan Account (What Are The Rules?)
Borrowing money from the company can make financial sense for directors, compared with using a commercial lender. But using from the company bank account for personal expenditure has to be managed carefully, as complex tax and accounting rules apply. Failure to follow the rules can result in HMRC action against the director, such as disqualification. What […]
Is Cash Accounting Right For Your Business?
There are two main accounting systems to choose from; these are ‘cash basis’ accounting and ‘accruals’ accounting. Which of these methods you use will depend on the size and nature of your business, as they each have different advantages. In general, cash accounting is best for ease, while accruals accounting is superior in terms of […]
How to Prepare Limited Company Accounts
Private limited companies in the UK have to prepare a set of accounts each year. Known as annual statutory accounts, they relate to the 12-month period ending on the company’s Accounting reference date (ARD). The ARD is the compamy’s official year-end as recorded with Companies House. The annual accounts are drawn up using financial records […]