Whilst saving tax should not be the key driver, the timing of business decisions can impact when you get the associated tax benefit. The trick is not dipping into the pots before payments fall due – projections will help with this too by identifying where gaps may arise.įinally, make use of those tax allowances. So, putting cash aside into deposit accounts to save towards VAT and corporation tax, for example, can take the stress away when the time comes to make the payment.

You should understand your business’s tax cycle and make provisions, as taxes can fall monthly, quarterly, and annually. By using cash accounting, which is available for businesses up to £1.6m turnovers, you only pay the VAT on monies you have collected in the quarter rather than what you have invoiced. This way, you are not using your money to pay VAT on invoices that won’t be settled until sometime after the VAT quarter or even the payment date. When properly maintained, online accounting software can provide you with real-time access to your key account balances and customer debts, while allowing you to keep an eye on overheads. As well as well financial reporting, handling your accounts online can help you get a better grip of your finances. Having a good digital bookkeeping system online can help have something more tangible to look at. Management reports (for reviewing your current balance sheet), debtor books, budgets, and cash flow forecasts should be at your fingertips. Whatever your size of business, you should be routinely receiving a regular stream of data from your finance department. For that, you need accurate, up-to-date information. The first step to good cash flow management services is to understand the ebb and flow of money through your business.

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