Accounts & productivity: two for SMEs
If your time as a small business is limited for book reading, one of the more essential is Finance for Small Business, and if your business consists of more than one man and his dog, you might take a look at the Asana workplace productivity offering.
Finance for Small Business by Emily-Coltman (right) is fourth in a 10 title Business Bites series, backed by Blackberry, published by Brightword, and already covering Twitter, Selling and Pitching Your Business.
“The UK’s tax system is a wilderness” says author Emily Coltman, “and in this book I aim to provide a map and compass to guide readers through, written in plain English and backed by more than ten years of acting as an accountant to small businesses.?
Her engaging definition for Sole Trader: “If it’s just you, your computer and your dogs (who don’t count as business partners even if you’re going to spend most of the profits on feeding them) then this could be for you,” recalls to Gaberlunzie, radio journalist Geoff Cameron, who would joke about his wife having to go out to work in order to support their ridgebacks!
Coltman, a Cambridge University graduate worked with micro-business clients, before starting her own business creating tutorial videos and then joined FreeAgent as its chief accountant. She is totally up-front about her affiliation and allegiance to Free Agent, but acutely aware of the limitations to on-line when discussing the desktop software packages as “of value in rural areas with no or slow broadband connection, where using an online systems wouldn’t work.”
Having examined business structures as partnership and limited liability partnerships and limited companies, she looks at the initial money, the paperwork, the simple accounts, tax, and VAT.
Do you need an accountant? and planning for the future wrap it up.
Coltman writes with judicious jargon busting definitions clearly and has an engaging turn of phrase, endearingly confessing in one footnote that “Companies House made me do the form again because I’d put 28th February instead of 29th February by mistake. For Pete’s sake!”
She’s also not above urging you “to grab a cup of coffee and/or large glass of wine and/or a gooey pastry, to fortify yourself to look at tax in the next chapter.”
Among her acute nuggets of advice:
“Don’t bother with ring binders, you’ll rapidly outgrow them.”
“Consider investing in a scanner such as Doxie (the size of a ruler).” And
“Don’t be tempted to bundle paperwork into a carrier bag and give it to you accountant once a year? (s/he)? will inevitably get extremely fed up with this..and end up giving you a quality of service much less than you and your business deserve.”
“If you run your business from home,” she warns, there is a large grey area around how much you can claim tax relief on as running costs of your home.”
In her example “home running cost (mortgage interest payment, but not capital) council tax, electricity and gas, water rates and insurance at £2,400 divided by (say) eight room of the house, makes £300. Claiming 90% of office and 20% of the lounge, allows a claim of £330 for business use of home.
“Be prepared,” she advises “to show HMRC inspector your calculations and why you’ve used the method chosen, ” and concludes cheerfully “Good luck, go forth and calculate.”
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