What’s the most tax efficient way to pay myself through my limited company?


???? The most tax-efficient way to withdraw money from your limited company in the UK will depend on your specific circumstances. However, here are some commonly used methods:

1️⃣ Salary (????): Paying yourself a salary from the company can be tax-efficient. You’ll need to register as an employee, set up a payroll system, and deduct income tax and National Insurance contributions (NICs). However, you’ll also benefit from personal income tax allowances.

2️⃣ Dividends (????): If your company has sufficient profits and you’re a shareholder, you can take dividends. Dividends are subject to different tax rates and thresholds, and you’ll have a tax-free dividend allowance. Remember to consider any tax implications, such as the dividend tax and potential higher tax rates for larger dividend amounts.

3️⃣ Pension contributions (????): Making pension contributions can be tax-efficient, as they can be deducted as a business expense, reducing your corporation tax liability. Personal contributions may also qualify for income tax relief.

4️⃣ Director’s loan (????): You can take money out as a director’s loan, but it should be repaid within a specific timeframe (usually nine months and one day from the end of the company’s accounting period). Failure to repay the loan can result in additional taxes.

5️⃣ Capital gains (????): If you sell or transfer assets owned by the company, such as property or investments, you may trigger capital gains tax. Proper planning and advice are crucial to ensure tax efficiency.

Get in touch with us today for personalised advice based on your specific circumstances and the latest tax regulations. ????????‍????

www.sunnysideaccountancy.co.uk/contact-us

How can small business owners work with their accountants to improve their profits?

???? Small business owners! ???? Want to boost your ????profits? Look no further than your ????accountant! Here’s how to maximize the ????business potential with their help:

1️⃣ Lay the groundwork: Build a strong relationship with your accountant from the get-go. Share your business goals, challenges, and financial records. Communication is ????.

2️⃣ Track it all: Stay on top of your finances. ????Record and categorize income, expenses, and investments. Regularly update your accountant to ensure accurate and up-to-date financial statements.

3️⃣ Budget like a boss: Work with your accountant to create a realistic budget that aligns with your goals. ????They can provide insights on cost-saving strategies and identify areas where expenses can be reduced.

4️⃣ Analyze, analyze, analyze: Your accountant can be your ????️‍♂️detective in deciphering financial data. Together, analyze profit margins, sales trends, and costs. Identify areas where profit can be increased and inefficiencies eliminated.

5️⃣ Tax planning: Don’t let taxes drain your ????profits! Collaborate with your accountant to develop a tax strategy that optimizes deductions and minimizes liabilities. Stay updated on tax law changes to ensure compliance.

6️⃣ Cash flow management: Smooth cash flow is essential for business success. Your accountant can help you manage receivables, payables, and forecast future cash needs. ????Plan ahead to avoid liquidity crunches.

7️⃣ Financial forecasting: ????‍♂️Predict the future! Work with your accountant to create financial projections and scenarios. Anticipate market changes, plan for growth opportunities, and adjust strategies accordingly.

8️⃣ Review and adjust: Regularly meet with your accountant to review financial reports and discuss performance. ????Identify areas for improvement, tweak strategies, and adapt as needed to drive profit growth.

Remember, your accountant is your ????BFF (Best Financial Friend). They have the expertise to guide you on the path to profitability. Collaborate, communicate, and watch your small biz soar! ????????????

Weighing up a big investment in your business

Are you considering investing in a new way to make your business more productive or streamlined? With a tight labour market, everyone’s time is at a premium – so finding ways to maximise productivity has never been more important.

But it can take considerable funds to pay for a new website, ecommerce platform, software system or automations. Here are a few questions to ask yourself when you’re weighing up the costs and potential benefits of a significant investment. 

What are the upfront costs – and the ongoing expenses? 

A website, for example, has a large upfront cost for the design, content creation and build. You might think that the costs are then done, but it must be updated and maintained. You can do that in-house, in which case someone needs to be assigned to that work, or you can outsource it. 

Always take into account the ongoing costs, because these are a vital consideration when you decide whether to make an important investment.

Which of your current costs will disappear? 

Some of the costs you currently incur may vanish with a new system. It might be as simple as no longer paying the cost of an old subscription. Or it might be time saved that is spent manually entering data, processing payments, or dealing with customer issues that arise from an outdated system. 

Financial costs are relatively easy to add to the calculations. It’s trickier with time, but try to put a value and quantity on what time might be saved if you can. 

How will this change your costs in the long run? 

Think about how your business will operate five years from now. Will this new investment allow you to increase your profitability without growing your team? Will you be able to spend more time finding outstanding high-value clients and less time on processes?

Any large investment should make your company run more smoothly, allow you to boost your output, and easily pay for itself.

When will this investment pay for itself? 

Once you have all these numbers in hand, you can formulate some idea of when the investment will pay for itself. We can help you estimate a likely timeframe, and some best- and worst-case scenarios. You don’t have to make big choices all on your own – let us help you analyse the costs and benefits to give you more confidence in your decisions.

How to Create a Balanced Business Budget

Creating a balanced business budget can seem like a daunting task, but it doesn’t have to be. There are a few simple steps that you can take to make sure that your budget is both realistic and achievable. We’ve put together a step-by-step guide to creating a balanced business budget so that you can take the guesswork out of the process.

Step 1 – Calculate Your Income

The first step toward creating a balanced business budget is to calculate your income. This may seem like a no-brainer, but it’s important to be as accurate as possible when estimating your income. After all, your budget can only be as balanced as the income that you’re bringing in. To get started, take a look at your past few months of financial statements and try to come up with an average monthly income.

If you’re just starting out, it’s important to be realistic about the amount of income that you can realistically expect to bring in. Don’t forget to account for seasonal fluctuations in your business’ income.

It’s also important to consider all of your streams of revenue. If you’re selling products, be sure to include both the cost of goods sold as well as any shipping and handling fees.

After you’ve calculated your income, it’s time to move on to expenses.

Step 2 – Fixed Costs

In order to create a balanced budget, you need to figure out what your business’s fixed costs are.

Fixed costs are those expenses that stay the same each month, such as rent, utilities, and loan payments. These are non-negotiable expenses that you have to pay no matter what.

Step 3 – Variable Costs

Variable costs are those expenses that fluctuate from month to month, such as inventory, shipping, and marketing.

The key to creating a balanced budget is to make sure that your variable costs don’t exceed your income. This can be a challenge, but it’s important to keep an eye on your spending in order to stay within your budget.

Your variable costs will increase along with volume of production. So if you sell more, you’ll send more. It is important to track your variable costs closely as your business grows.

Accounting software can help you track your income and expenses so that you can see where your money is going each month. This information can be helpful in creating a realistic and achievable budget.

Step 4 – One-Off Costs

There are always going to be one-time costs associated with running a business. These costs can include things like equipment purchases, website development, and trade show fees.

When budgeting for one-off costs, it’s important to consider both the short-term and long-term impact of the expense. For example, a new piece of equipment may be a large upfront cost, but it could save you money in the long run by increasing efficiency.

Step 5 – Consider Your Cash Flow

Another important factor to consider when creating a budget is your business’s cash flow. Cash flow is the amount of money that is coming in and out of your business each month.

It’s important to have a positive cash flow in order to maintain a healthy budget. If your expenses are higher than your income, you’ll need to find ways to cut costs or increase revenue.

There are a number of ways to improve your cash flow, such as offering discounts for early payment, setting up automatic payments, or offering payment plans.

Step 6 – Putting It All Together

Now that you’ve calculated your income, expenses, and cash flow, it’s time to put it all together to create a balanced business budget.

However, you can’t just create a budget and then set it aside. You need to revisit and review it regularly to make sure that it’s still accurate and on track.

As your business grows and changes, your budget will need to change too. Be sure to review it at least once a month to make sure that it’s still in line with your current situation.

Creating a balanced business budget is an important part of running a successful business. By taking the time to calculate your income and expenses, you can ensure that your business is on track for long-term success.

Project Cost Management – A Quick Guide

Cost management is one of the most important aspects of any project. Without careful planning and monitoring, costs can quickly spiral out of control, leading to disastrous results in terms of the project itself and your business’ profitability.

In this blog post, we’ll review the basics of project cost management, including how to estimate costs, track spending, and stay within budget so that you can ensure that all of your projects are profitable.

What is Project Cost Management?

Project cost management is the process of estimating, tracking, and controlling the costs associated with a project. It includes both the direct costs, such as labour, materials and equipment, and indirect costs like travel and overheads.

Why is Project Cost Management Important?

Project cost management is key to success because it ensures that your project stays within budget. By carefully estimating and tracking costs, you can avoid cost overruns which can quickly eat into your profits.

Gathering actual data from past projects also helps you to create more accurate cost estimates for future projects, making them more likely to be profitable.

Resource Planning

One of the most important aspects of project cost management is resource planning. This involves estimating how many resources, such as labour hours or materials, will be required to complete the project.

In order to perform accurate resource planning, you need to create a clear blueprint of the time, resources and activities required to see the project through to completion. You must understand the long- and short-term goals of the project and identify any areas where there may be resource deficits.

Cost Estimation

After you have created a resource plan, you can begin to estimate the costs associated with each task. This includes both direct and indirect costs.

Direct costs are those that are directly related to the project, such as labour, materials, and equipment. Indirect costs are those that are not directly related to the project but still need to be considered, such as travel and overhead.

To estimate costs, you will need to consider the quantity of resources required, the cost of those resources, and any other associated costs. For example, if you are estimating the cost of labour for a project, you will need to consider the number of hours required and the hourly rate of pay for the workers.

Once you have estimated the costs for each task, you can add them up to get an overall estimate for the project. It is important to remember that cost estimates are never 100% accurate and there will always be some uncertainty.

As such, it is a good idea to create a contingency fund to cover any unexpected costs. Having a detailed resource plan in place helps you to see where costs may increase and allows you to make adjustments accordingly. For example, if you know that a certain task will require more labour hours than originally planned, you can budget for overtime or hire additional staff to complete the task.

Budgeting

After you have estimated the costs for the project, you need to create a budget. The budget is a document that outlines all of the expected costs for the project and how those costs will be paid. It also breaks down the project into stages, so that you know how much money you will have available at different points.

Creating a detailed budget helps you to track spending and ensure that you stay within your overall project budget. Once you have a solid budget in place, it’s time to get to work – and that means practicing cost control.

Cost Control 

Cost control is the process of monitoring and managing project costs. It involves tracking actual costs against the budget, investigating variances, and taking corrective action where necessary.

It’s important to closely track costs and compare them against the budget on a regular basis. This allows you to see where money is being spent and identify any areas where costs are exceeding the budget before things get out of control.

Once you have a good understanding of how much things are actually costing, you can start to make adjustments to keep costs under control. For example, if you find that labour costs are higher than expected, you may need to adjust the budget or find ways to reduce the amount of time required for each task.

Careful cost control will also help you to improve cost estimation and management in the future, because you will have a better understanding of the factors that impact project costs.

Summary

Project cost management is an important part of ensuring that your project is completed on time and within budget. By carefully estimating costs, creating a detailed budget, and practicing cost control, you can keep your project on track and avoid any unexpected surprises.

How to Scale Your Business – 4 Key Principles to Follow

Are you looking to take your business to the next level? If so, you need to start thinking about scaling your operations. Scaling a business can be difficult, but if done correctly it can lead to tremendous growth. There are certain steps required when scaling, but it’s also important to have overarching principles to guide you on this journey to ensure that you stay on track for success.

#1 – Attitude and Values are Everything

When it comes to creating the right team to help you scale, it all starts with attitude and values. You need to be very clear about what your company stands for and what kind of people you want to work with. The right team will help support the culture you’re trying to create and maintain as you grow.

It’s important to define your company values in order to attract the right staff and contractors. If you want to create a customer-centric business, then your team should reflect that. 

If you’re looking to be the most innovative company in your industry, again, your team should be a reflection of that. Your values will help guide you in making the right hiring decisions as you look to expand your business.

Basically, it’s all about practicing what you preach.

#2 – Think Ahead

Scaling is about creating the business you want, not running the one you have. This means you need to think ahead to what the future looks like for your business. What are your long-term goals? What do you want to achieve?

This is where a lot of businesses make mistakes. They get caught up in the day-to-day and lose sight of the big picture. If you want to scale successfully, it’s important to have a clear vision for the future and make sure everyone on your team is aligned with that.

If you’re not ready for growth, then things will start to break down in your business as it expands. You need to ensure that your systems are able to cope with increased demand before it arrives. You need a team that is ready for challenges before they appear. 

In short, you need to be prepared for success before it happens.

#3 – Company Culture Matters

It’s not enough to just have a great product or service. You need to have the right team in place to support your growth. And that starts with a great company culture.

As your business grows, it’s important to maintain the culture you’ve worked so hard to create. And if you haven’t yet created a positive company culture, it’s time to change that.

Your team are at the centre of everything you do. The working environment you create affects spending, turnover, productivity and profitability, so it’s important to get it right.

A good company culture attracts the right people, reduces staff turnover and helps you scale successfully. It’s also something that should be constantly nurtured and developed as your business grows.

#4 – Be Flexible

Yes, you need to stay true to your core values, but as a business owner you also need to be open to change.

Flexibility is key when scaling. You need to be able to adapt to change quickly, without compromising your values.

Just because you’ve always done things a certain way doesn’t mean that’s the best way to do them. As your business grows, be open to new ideas and ways of doing things. You need to be willing to experiment and try new things, such as tweaking your processes or the way you structure your team.

The most successful businesses are those that are constantly evolving. They’re always looking for ways to improve and grow. The covid-19 pandemic in particular highlighted the importance of being able to pivot quickly and adapt to change.

So, don’t be afraid to mix things up a bit as you scale. It could be the key to your success.

Final Thoughts

Growing a business is never easy, but if you follow these four key principles, you’ll be on the right track. Having a clear vision for the future, maintaining your company culture, being prepared for success and being flexible are all essential ingredients for scaling your business. 

If you’re not ready to scale or don’t have a good team in place, then it’s time to reevaluate your priorities. Remember, scaling is about creating the business you want, not running the one you have.

Things You Didn’t Know Your Accountant Could Do

Did you know that your accountant could do more than just help you with your taxes? In fact, accountants can help you with a variety of tasks, including bookkeeping, financial planning, and even business consulting. If you’re not taking advantage of all the services your accountant has to offer, you’re missing out on valuable assistance and wasting money. 

Let’s take a look at six things that your accountant can do for you that you may not have considered until now.

#1 – Strategise

One of the most important things your accountant can do for you is help you plan for your business’ future. They can help you set financial goals, identify key performance indicators (KPIs) and create a strategy to improve the financial health of your business.

This is especially important if you’re thinking of expanding your business or making any major changes. Your accountant will be able to advise you on the best course of action to take and create a plan of action to ensure your success.

#2 – Cash Flow Management

Another important task your accountant can help you with is managing your business’s cash flow. They can help you track where your money is coming in and going out, identify any areas where you may be overspending, and provide advice on how to improve your cash flow situation.

This is vital for all businesses, but especially small businesses who may have limited resources. By keeping a close eye on your cash flow, you can avoid any financial problems down the road.

#3 – Debt Management

Not all debt is bad. In fact, some debt can be used to help your business grow. But it’s important to know how to manage your debt so that it doesn’t become a burden. That’s where your accountant comes in.

Your accountant can help you understand the different types of debt and their pros and cons, as well as develop a plan to pay off any debt you may have. They can also negotiate with creditors on your behalf and help you get better terms.

If you’re struggling with debt, your accountant can be a valuable ally.

#4 – Help with Loan Applications

If you’re thinking of applying for a loan, your accountant can help you with the process.

They can advise you on what type of loan would be best for your business and put together a package of financial statements and other documentation that lenders will require.

They can also help you understand the different terms and conditions of loans so that you can make the best decision for your business.

Applying for a loan can be a complicated and stressful process, but with the help of your accountant, it doesn’t have to be. A great accountant will prepare a strong pitch for your business to maximise your chances of success and help you to negotiate the best rates and terms possible, whilst ensuring that you understand exactly what you’re signing up for.

#5 – Increase Efficiency

Your accountant can help you to streamline your business operations and increase efficiency. They will take a close look at your current systems and procedures and make recommendations for improvements. This could include automating tasks, eliminating redundant processes, or improving communication between departments. In addition, they can help you to implement new technologies that will save you time and money.

By increasing efficiency, you can free up time and resources to focus on other areas of your business. This not only makes your business more profitable, but also more enjoyable to run.

#6 – Support You

Accountants are often thought of as primarily being number crunchers, but first and foremost, they’re actually great listeners who take the time to understand their clients’ individual pain points. This allows them to provide targeted support and advice that is tailored to each client’s specific needs.

In addition to providing expert advice, your accountant can also be a great sounding board for your ideas. They can help you to flesh out your plans, identify potential problems, and find creative solutions. And when things get tough, they’ll be there to lend a supportive ear.

Final Thoughts

At the end of the day, your accountant is more than just someone who does your taxes. They’re a valuable business partner who can help you to overcome challenges, grow your business, and achieve your goals. If you’re not taking advantage of all the services your accountant has to offer, you’re missing out on valuable assistance and support.

Hiring your first employee – things worth knowing

Hiring your first employee is a big step as a business owner. It’s great that you’re ready to grow your business and delegate some responsibility in order to narrow your focus, but it’s also natural to be nervous about the process. We’ve compiled a list of the most important things to bear in mind when hiring your first employee so that you can prepare and make the right decision for your business.

#1 – Payroll

When you hire an employee, you need to put a payroll system in place to make sure that employees get paid the right amount at the right time. Otherwise, your staff won’t be with you for very long.

You will need to submit National Insurance contributions and PAYE tax where applicable. And may also need to set up a Pension Scheme.

#2 – Contracts

It’s important to have a written contract in place with all employees. This document should outline the employee’s job duties, hours of work, pay rate, and benefits. It’s also a good idea to include an exit clause in case the relationship between employer and employee doesn’t work out.

#3 – A Code of Conduct

When you’re operating solo, you don’t really need a code of conduct – you know how to behave. However, when you have employees, it’s important to have a code of conduct in place that everyone is expected to follow. 

This document should outline the company’s expectations for employee behaviour, both on and off the job. It should also include disciplinary procedures for employees who violate the code of conduct.

#4 – Management Skills

If you’re not used to managing people, it’s important to learn the basics of good management before hiring your first employee. This includes setting expectations, providing feedback, and creating a positive work environment.

This is an important part of your growth as an entrepreneur. Learning great management skills as early on in your journey as possible will set you up for success.  Especially as your business grows and you add even more employees to your organisation.

#5 – Hire Based on Attitude

You can teach new skills and provide experience, but you can’t change a bad attitude.

That’s why it’s important to take attitude into account when hiring your first employee. 

Look for someone who is positive and enthusiastic about their work, even if they don’t have a lot of experience. Employees who are keen to grow and develop their skills will prove immensely valuable to you and your company.

Of course, you may well be keen to hire an experienced employee, but still be sure to screen candidates carefully and pay close attention to their attitude.

#6 – Ensure That You’re Financially Ready

Hiring employees is a great way to grow your business, but you need to make sure that the timing is right.

In other words, make sure that you’ve got enough money in the bank before making this big decision. Once you have an employee on board, it’s important not to let them down by being unable to pay their wages on time.

If you’re not sure whether your business is ready for its first employee, consult with your accountant or financial advisor to get their opinion.

Final Thoughts

When it comes to hiring your first employee, there are a few things you need to keep in mind. The most important of these is getting everything set up so that they get paid correctly and on time. You’ll also need contracts for both the employer and the employee, as well as a code of conduct for all staff members who work with you.

If you’re not sure whether or not your company is ready for its first employee, consult with an accountant or financial advisor who can help guide you through the process of hiring employees, managing all their associated responsibilities and ensuring that your operations remain cost-effective.

How to Use Profitability Ratios to Grow Your Small Business

If you’re looking to grow your small business, you need to understand profitability ratios. These ratios help you measure how efficiently your business is using its assets and generating revenue. There are three main types of profitability ratios: operating, asset use, and contribution. In this blog post, we’ll discuss what each one is and how to use them to make smart decisions for your business.

What is a Profitability Ratio?

A profitability ratio measures how efficiently your business is using its assets and generating revenue. Profitability ratios are used by lenders, investors, and profit-seeking businesses to evaluate a company’s ability to generate profit relative to sales, assets, or equity.

Profitability ratios can be calculated on an annual basis or over any period you choose. For example, if you’re evaluating your company’s profitability ratio based on the sales of widgets in a specific month, you could calculate each ratio using that period.

Operating Profitability Ratio

The operating profitability ratio measures how much profit your business generates from its operations compared to the revenue it earns. To understand this better, let’s look at an example.

Let’s say you own a company called Widget Co., which manufactures widgets and sells them to retailers for $100 each. In one month, your business produced 100,000 widgets and sold 70,000 of them at $100 each. The operating profitability ratio would be calculated as follows:

First, we calculate the gross profit by subtracting the cost of goods sold from the revenue. This gives us $700,000 (70,000 x $100 – 100,000 x $60).

Next, we divide the gross profit by the revenue to get the operating profitability ratio. This gives us 0.70 (700,000 / 1000000).

This tells us that for every dollar in revenue Widget Co. generates, it earns 70 cents in gross profit.

Asset Use Profitability Ratio

The asset use profitability ratio measures how much profit your business makes from the use of its assets, minus the cost of those assets. This ratio is helpful for businesses that have a lot of fixed assets, such as property and equipment.

Let’s use the same example as above to calculate asset use profitability ratio. In this scenario, Widget Co.’s fixed assets are worth $200,000 and its total revenue is $100,000 (70,000 units sold at $100 each). We’ll also assume that the company has no debt or other liabilities.

First, we calculate the net profit by subtracting all expenses from revenue. This gives us $300,000 (100,000 x 100 – 70,000 x 60).

Next, we divide the net profit by fixed assets to get the asset use profitability ratio. This gives us 0.15 ($300,000 / 2000000).

This tells us that for every dollar in fixed assets Widget Co. owns, it earns 15 cents in net profit.

Contribution Profitability Ratio

The contribution profitability ratio measures how much money your business makes from each sale after deducting variable expenses such as material costs and labour. It’s also known as the gross margin percentage because it is calculated by dividing the gross margin by sales.

Let’s use the same example as above, but this time we’ll assume that Widget Co. has a contribution margin of $40 per widget (meaning it costs the company $60 to produce each widget, but it sells them for $100).

First, we calculate the gross margin by subtracting the cost of goods sold from the revenue. This gives us $600,000 (100,000 x $100 – 100,000 x $60).

Next, we divide the gross margin by sales to get the contribution profitability ratio. This gives us 0.60 (600,000 / 1000000).

This tells us that for every dollar in sales Widget Co. generates, it earns 60 cents in gross profit.

This figure can help you to understand how effective your marketing efforts are and whether you’re pricing your products correctly.

How to Use Profitability Ratios

Profitability ratios are helpful when used alongside other financial metrics because they can help you make sense of your business’s overall profitability and identify areas where you can improve performance. For example, if your company’s asset use profitability ratio is low, you might consider investing in more fixed assets to increase profits.

Likewise, if your contribution profitability ratio is high, you might be able to reduce the cost of goods sold by finding a cheaper supplier or streamlining production.

Final Thoughts

Keeping track of your company’s profitability ratios can help you make informed decisions about how to improve profitability, reduce expenses and grow your business. A more profitable company is better positioned to earn more revenue, hire new employees, and reinvest.

4 Bad Financial Habits That Are Hurting Your Business

Habits are everything.  From getting up early, to working out and eating healthy, habits are what differentiate successful people from others. The same applies in business – entrepreneurs who have good financial habits tend to make better decisions than those who lack them.

If you have poor financial habits, then your small business could be suffering as a result. What’s more is that many business owners aren’t even aware of the behaviours that are costing them money and  slowing their growth.

Let’s take a look at four bad financial habits that could be hurting your business:

#1 – Not Paying Attention to Expenses

One of the biggest killers of small businesses is neglecting to keep track of expenses. This often leads business owners to overspend on unnecessary items, or worse: not having enough money to cover necessary costs. The key to overcoming this habit is creating a budget, and sticking to it.

This will help you identify areas where you’re overspending, so that you can make the appropriate changes. For example, if your business spends too much on travel expenses, then consider having meetings via Skype or Google Hangouts instead of in-person whenever possible.

Working with an accountant is a great way to keep you accountable when it comes to  your finances. This person can help you create a budget, and  assist you with making financial decisions on behalf of your business.

Having someone who assures that things are done correctly is a lifesaver for many small businesses, especially those with little experience in managing their own finances.

#2 – Paying Too Much for Office Space

Another common mistake that business owners make is spending too much on office space. This can be a major issue, especially if your business isn’t generating a lot of revenue yet.

There are several ways to avoid overspending on office space. For starters, consider working from home until your business is more established. You could also look into renting  office space on a shared basis, or taking out a flexible contract with a coworking space. This means you won’t have to worry about forking out for furniture and equipment, and you’ll have the flexibility to pay for less space when things are slow.

#3 – A DIY Attitude

Doing everything yourself saves money, right?

Wrong.

Many small business owners try to do things on their own,  but this can be a huge waste of time and money. In some cases, you may end up doing more damage than good. This is especially true when it comes to financial matters – unless you’re an accountant or bookkeeper, there’s no reason for you to handle all  the financial tasks for your business.

Hiring professionals to help you with bookkeeping, accounting and other financial matters can save you a lot of time and money in the long run. Not only will you have more time to focus on what you’re truly good at, but you’ll also have peace of mind knowing that everything is being handled correctly.

#4 – Lax Invoicing and Billing Practices

Another bad financial habit that can hurt your business is lax invoicing and billing practices. This happens when you don’t send out invoices in a timely manner, or when you don’t follow up on unpaid bills.

Both of these things can lead to money being left on the table, which is obviously not ideal  for any small business.

To make sure that you don’t fall victim to this bad habit, it’s a good idea to create an invoicing and billing schedule. This ensures that your bills are sent out on time each month, without fail. It also helps you avoid forgetting about overdue bills, so that you can follow up with clients in a timely manner.

You may want to consider hiring an accountant or bookkeeper to help you with this task, as it’s something that can easily be overlooked by busy business owners. A simple mistake like forgetting to send out invoices on time could cost your business thousands of dollars each year – money that could have been spent on paying bills, marketing your business, or hiring new staff.

Final Thoughts

Make sure to avoid these bad financial habits if you want your business to succeed! Implementing a budget, working with professionals, and sending out invoices on time are all great ways to keep your finances in check. Remember that over time, good habits compound to  provide great results!