Finance and Budgeting

Course Content Assessment Incorporation Bookkeeping Cash Flow Raising Finance Tax and VAT Social Currency

Assessment Research, Research, RESEARCH! Current Cash Position Start up costs required Running costs Funding

Incorporation Companies Acts require accounts, in a specified format to be filed on public record at Companies House every year Directors’ report Accountants’ report Profit and loss account Balance sheet Notes to the accounts Filing deadline is 9 months after year end Penalties for late filing Large companies must have accounts audited

Bookkeeping & Accounts It is essential to keep accurate records The purpose is to determine the success and financial health of a business Basis of paying tax Bookkeeping needs to be set out clearly so you and the tax man can understand it Don’t forget cash is everything

What needs to be recorded? Every penny that is received and paid by the business This includes all pre-trading expenses This also includes any non-business receipts or payments, because the business books should ‘balance’ or ‘agree’ with the bank account. Money owed to the business (invoiced but not yet received) Money owed by the business (invoiced but not yet paid) Many small business owners remember the above, without needing formal records !

Cash Book DateCustomerAmount received Cash salesChequeCredit/ debit card Bank pay-in amounts

Purchases and Expenses DateSupplierAmount paidPaid cashPaid chequePaid credit/debit card

Sales Ledger DateInvoice number CustomerNetVATGrossDate paid Payment type

Cash Flow These are sales/costs broken down over a fix period of time when they actually happen Pre-start costs Opening balance Money in Money out What’s left Carry it forward Real money in real time

Raising Finance In the early stages of your enterprise you may need a little financial assistance, where can you go? The Three Fs The University Kick Starters Grants Banks Lenders of Last Resort

V.A.T. Registration Compulsory if taxable supplies exceed £81,000 Voluntary below the limit Keep track of rolling 12 months (or next 30 days!) Penalties for late registration Apply to Customs & Excise

Taxation (Income Tax) IncomeIncome Tax rate 20014/15 Up to £10,0000% £10,001- £41,865 20% Over £41,866- £150,000 40% Over £150,00045%

Taxation (National Insurance) ClassPaid byOnRate 1EmployeesUp to £7956 £7957 to £41,865 Over £41,865 Nil 12% 2% 1EmployersUp to £7956 £7957 to £41,865 Over £41,865 Nil 13.8%

Business Expenditure A business can incur any expenditure it thinks fit and proper Only expenditure which is ‘wholly and exclusively’ incurred for the purpose of the business is allowable as a tax deduction Entertainment Clothing (except safety/uniforms) Subscription to Golf/Health Club Formation costs of Ltd. Co. Personal drawings (self employed ) Purchase of capital items

Social Currency It is important for Social Enterprises and Charities to remain solvent. However how are you going to measure your social purpose? Key social areas SLAs and KPIs Commercial vs Social Never loose sight of why you are doing it

Useful Contacts ACCA (Association of Chartered Certified Accountants) HMRCwww.gov.ukwww.gov.uk VAT Officewww.gov.uk/business-tax/vatwww.gov.uk/business-tax/vat Companies Househttp://ow.ly/J7SyQhttp://ow.ly/J7SyQ The Best Small Business Accounts Book - Peter Hingston Bookkeeping For Dummies - Jane Kelly, Paul Barrow, Lita Epstein Banks are also a valuable source of help[ and advise.

What We Have Covered Today Assessment Incorporation Bookkeeping Cash Flow Raising Finance Tax and VAT Social Currency

Wed 18 March 2015 Managing Your Project

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