So, you run your own business, master of your own destiny, making money for yourself and no-one elseâ?¦ or are you?

Hopefully you have an accountant who prepares your year end accounts but what do you really understand about your business finances throughout the year?

There are many reasons it is essential you keep your business books up to date and review what they tell you.

If you’re VAT registered, maybe you or your accountant prepares your VAT return each quarter but do you stop to think what that return tells you about your business?

Or maybe you’re not VAT registered and use your bank balance as a measure of success.

Just because there’s money in the bank today doesn’t mean you have profit to spend, there maybe suppliers waiting for payment or even a tax bill building.

Having to pay a VAT bill doesn’t even necessarily mean that you’re making money, as certain expenses like wages and insurance are excluded from the VAT return.

If you are using one of the many free or low cost online bookkeeping packages such as SAGE start or Xero, or one of the more sophisticated online or desktop such as QuickBooks or SAGE 50c there is built in management reporting, such as the Profit and Loss report, to tell you how much profit the business has made this month, quarter or year; the Aged Debtors report which shows how much the business is owed by your customers and how old the debt is; Aged Creditors report which shows how much you owe your suppliers and Cash-flow forecasting to give you an idea of what cash you have available in the next few weeks. With all this information to hand you’ll quickly understand more about your business than you ever thought possible, reduce bad debt and improve profitability. If you are new to business, you may not be VAT registered but remember the threshold for registration is currently £85,000 over a rolling 12 months, and you need to keep any eye on this if your business is growing as there are penalties for late registration for VAT.

If you need help ask your accountant to get you started.

It’s easy to do and will transform how you see your business.

Too busy?

Your accountant can help with some or all of the work, leaving you even more time to focus on improving your business results.