4 ms·

I’m not sure how this is possible? Don’t you need to submit accounts every year and pay corporation tax? Certainly in the U.K. small businesses with a turnover

I’m not sure how this is possible? Don’t you need to submit accounts every year and pay corporation tax? Certainly in the U.K. small businesses with a turnover under a certain amount can have their accounts signed off by a chartered accountant and then submitted to companies house. Over a certain amount accounts have to be audited. Day to day - cash flow is the most important thing to any business. Can you meet your outgoings, what is your burn rate. Being able to predict several months into the future with some degree of certainty is very useful. How much cash will be in the bank at the end of each month over the next 6-12 months. If our prediction is wrong, why are they wrong? What assumptions are we making that are incorrect? If you are burning cash, what is the runway? How many months before fund raising is needed?

r_singh 3y ago
A contract accountant prepares my balance sheet for tax purposes. Business is cash flow positive.At any point, I know how much I have and can spend. However, I don't have any system to update info on expenses and revenue regularly that would allow me to see any sort of pattern. My expenses were close to nil compared to revenue until this year. So I could get away with no effort on it. Thanks for the tips on the kind of questions I need to be able to answer. I agree that it is very important.
- iamflimflam1 3y ago
  Probably worth asking the accountant what software they recommend. Xero is very popular with small businesses and accountants. If you have a lot of transactions then a part time or full time bookkeeper can be a good investment. Most accounting software that I’m aware of don’t really do much in the way of predicting cash flow. A lot of CFOs for small businesses end up with fairly hokey spreadsheets that attempt to model things along with various scenarios (hiring plans, contract wins etc)
- multjoy 3y ago
  I use Xero, having switched from Quickbooks which was fucking opaque. Your accountant will also be able to use Xero which I suspect they will appreciate. You can also link it to bank accounts and credit cards, which makes reconciling very easy.
tonyedgecombe 3y ago
>Certainly in the U.K. small businesses with a turnover under a certain amount can have their accounts signed off by a chartered accountant and then submitted to companies house. For very small businesses you can handle it all yourself with the help of an HMRC tool. https://www.unbiased.co.uk/discover/tax-business/running-a-business/micro-entity-accounts-all-you-need-to-know https://www.unbiased.co.uk/discover/tax-business/running-a-b...
- iamflimflam1 3y ago
  I didn’t know that - very useful!

r_singh 3y ago

A contract accountant prepares my balance sheet for tax purposes. Business is cash flow positive.At any point, I know how much I have and can spend. However, I don't have any system to update info on expenses and revenue regularly that would allow me to see any sort of pattern. My expenses were close to nil compared to revenue until this year. So I could get away with no effort on it. Thanks for the tips on the kind of questions I need to be able to answer. I agree that it is very important.

iamflimflam1 3y ago
Probably worth asking the accountant what software they recommend. Xero is very popular with small businesses and accountants. If you have a lot of transactions then a part time or full time bookkeeper can be a good investment. Most accounting software that I’m aware of don’t really do much in the way of predicting cash flow. A lot of CFOs for small businesses end up with fairly hokey spreadsheets that attempt to model things along with various scenarios (hiring plans, contract wins etc)
multjoy 3y ago
I use Xero, having switched from Quickbooks which was fucking opaque. Your accountant will also be able to use Xero which I suspect they will appreciate. You can also link it to bank accounts and credit cards, which makes reconciling very easy.

tonyedgecombe 3y ago

>Certainly in the U.K. small businesses with a turnover under a certain amount can have their accounts signed off by a chartered accountant and then submitted to companies house. For very small businesses you can handle it all yourself with the help of an HMRC tool. https://www.unbiased.co.uk/discover/tax-business/running-a-business/micro-entity-accounts-all-you-need-to-know https://www.unbiased.co.uk/discover/tax-business/running-a-b...

iamflimflam1 3y ago
I didn’t know that - very useful!