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Understanding Making Tax Digital for Income Tax (MTD for IT): What You Need to Know Ahead of April 2026

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Understanding Making Tax Digital for Income Tax (MTD for IT): What You Need to Know Ahead of April 2026

In April 2026, the UK government is set to expand its Making Tax Digital (MTD) initiative to include Income Tax Self-Assessment for sole traders and landlords. This marks a significant shift in the way businesses and individuals report their tax information to HM Revenue & Customs (HMRC). Here’s everything you need to know about the new regulations and how you can ensure compliance ahead of the change.

What is Making Tax Digital for Income Tax (MTD for IT)?

MTD for IT is part of the government’s broader initiative to digitalise the tax system. Originally launched for VAT in 2019, MTD will extend to Income Tax Self-Assessment from April 2026. This new phase aims to simplify the tax process, reduce errors, and improve overall efficiency by moving tax reporting to an online platform.

Who Will Be Affected?

Starting in 2026, MTD for IT will apply to:

  • Self-employed individuals: Those with business income exceeding £50,000 annually.

  • Landlords: Property owners who earn rental income over £50,000 annually.

It’s important to note that from April 2027, the £50,000 threshold will be lowered to £30,000, potentially bringing more taxpayers into the fold. Those who fall into these categories will need to keep digital records and submit quarterly updates to HMRC.

Key Requirements for Compliance

To comply with MTD for IT, taxpayers must meet several requirements:

  1. Maintain Digital Records: Traditional paper-based systems will no longer suffice. Businesses must maintain their financial records digitally using compatible software.

  2. Quarterly Updates: Taxpayers must submit updates to HMRC every three months, outlining their income and expenses.

  3. End-of-Period Statement (EOPS): At the end of the tax year, you must provide a final declaration that confirms the accuracy of the quarterly updates.

Use of Compatible Software: To comply with MTD, businesses must use MTD-compatible accounting software. These tools will automate record-keeping, reduce human error, and streamline the submission process.

Benefits of MTD for IT

MTD for IT promises several benefits for those who comply:

  • Improved Accuracy: By automating processes and providing real-time data, the chances of errors in tax submissions are reduced.

  • Time Savings: The digital system simplifies record-keeping and tax submissions, freeing up time for business owners to focus on their operations.

  • Better Financial Management: With real-time access to financial data, businesses can make informed decisions and track their finances more efficiently.

  • Reduced Paperwork: Digital submissions reduce the need for paper-based records, making the entire process more streamlined.

Challenges and Considerations

While MTD for IT brings many advantages, it’s important to consider the potential challenges:

  • Initial Setup Costs: Switching to digital record-keeping and adopting the right software can incur upfront costs.

  • Learning Curve: The transition to digital tools might require some learning and adjustment, especially for those accustomed to paper-based methods.

  • Ongoing Compliance Costs: Businesses will need to factor in the cost of MTD-compatible software and ongoing maintenance.

  • Data Security: The transition to digital record-keeping places greater emphasis on securing sensitive financial data.

Preparing for MTD for IT

To ensure you’re ready for MTD for IT, here are some actionable steps:

  1. Evaluate Your Current Practices: Review how you currently keep records and identify gaps in your system. If you rely on paper-based records, now is the time to consider switching to digital.

  2. Select MTD-Compatible Software: Research different software solutions that align with MTD regulations. Consider factors such as ease of use, cost, features, and customer support when selecting a solution.

  3. Training and Support: Take advantage of training resources offered by your chosen software provider. Proper training will help you familiarise yourself with the new system, ensuring a smooth transition.

  4. Stay Up to Date: Keep an eye on government updates related to MTD for IT. HMRC regularly releases new guidance that may impact how you prepare for the changes.

Final Thoughts…

MTD for IT is set to bring substantial changes to how businesses and landlords report income tax, starting in April 2026. While the transition to digital tax reporting may present some challenges, the long-term benefits—including better accuracy, efficiency, and financial transparency—are undeniable. By preparing ahead of time, selecting the right software, and familiarising yourself with the process, you can ensure compliance and take full advantage of the changes that MTD for IT will bring.

For expert advice on preparing for MTD for IT or assistance with selecting the right accounting software, get in touch with Woodville Accounting & Payroll Ltd today.

 

Tel: 01283 819385 | Email: [email protected] 

Bretby Business Park, Ashby Road Bretby Burton On Trent DE15 0YZ

Understanding Making Tax Digital for Income Tax (MTD for IT): What You Need to Know Ahead of April 2026 Read More »

accounting and payroll for small businesses

Making Tax Digital for Income Tax – What You Need to Know

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From April 2026, a major change is coming to how many people report their income tax. Known as Making Tax Digital (MTD), the new system is designed to move tax reporting online. If you’re a sole trader or landlord in Burton-on-Trent or Swadlincote, it’s time to get prepared.

At Woodville Accounting & Payroll, we’re already helping local clients make the switch to digital, so they’re ready well before the deadline.

What Is Making Tax Digital?

Making Tax Digital is part of HMRC’s plan to modernise the UK tax system. It’s already in place for VAT-registered businesses and will soon apply to Income Tax too.

From April 2026, anyone earning over £50,000 from self-employment or property income will need to follow MTD rules. This means:

  • Keeping digital financial records
  • Submitting quarterly updates to HMRC using approved software
  • Filing a final annual declaration

By April 2027, the threshold will drop to £30,000, affecting even more taxpayers.

How Will It Affect You?

If you currently track your income and expenses on paper or a spreadsheet, you’ll need to switch to MTD-compliant software. You’ll also need to start reporting to HMRC more frequently – every three months instead of just once a year.

It’s a new way of working, but with the right support, it can actually make managing your tax simpler.

Getting the Right Software

There are lots of software options out there, from basic tools for small businesses to more comprehensive systems. The right one for you will depend on how complex your finances are and how comfortable you are with technology.

At Woodville Accounting & Payroll, we’ll help you:

✔Choose software that meets MTD requirements

✔Set it up properly

✔Learn how to use it with confidence

✔Stay on track with your deadlines

Why Start Preparing Now?

Although the change doesn’t take effect until 2026, starting early means you’ll avoid any last-minute stress. By switching to digital now, you’ll get used to the software and how the system works – well before you’re required to use it.

You’ll also benefit from clearer insights into your finances, fewer tax errors, and less paperwork in the long run.

We’re Here to Help

We’ve already started helping sole traders and landlords across Burton-on-Trent and Swadlincote get ready for MTD. Whether you want full support with everything, or just a little help to get set up, we’re ready when you are.

Our services include software setup, bookkeeping support, tax advice, and quarterly submission management – all personalised to suit your business.

Speak to Your Local Accountant Today

Let’s make the transition to digital tax simple and stress-free. Whether you’re looking for help getting started or want full support throughout the year, we’re here to help.

Tel: 01283 819385 | Email: [email protected] 

Bretby Business Park, Ashby Road Bretby Burton On Trent DE15 0YZ

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New Financial Year, New Opportunities: Is Your Business Ready?

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New Financial Year, New Opportunities: Is Your Business Ready?

For medium-sized and growing limited companies in Burton-on-Trent, the new financial year marks more than just a change in calendar—it’s a crucial opportunity to assess performance, sharpen forecasts, and lay the groundwork for future growth.

If your business is turning over £250k to £1m+, your financial operations need to be more than functional—they need to be strategic. At Woodville Accounting & Payroll Ltd, we work with ambitious local businesses to go beyond compliance and offer real insights into sustainable growth and profitability.

1. Refine Cash Flow for Strategic Growth

At scale, inconsistent cash flow can damage investment opportunities, delay recruitment, or limit reinvestment. Now’s the time to:

  • Tighten debtor controls and credit terms

  • Build cash flow projections aligned with quarterly targets

  • Introduce rolling forecasts to support decision-making

  • Segment cash flow by department or business unit

With businesses in this turnover range, it’s not just about survival—it’s about ensuring capital is available to fund growth.

📌 Tip: Our clients often benefit from three-way forecasting—integrating P&L, balance sheet, and cash flow projections into one dynamic model.

2. Strengthen KPI Frameworks to Drive Performance

Larger businesses need clear financial and operational KPIs to guide strategic decisions. These might include:

  • Gross profit per product or service line

  • Overhead recovery rates

  • Return on capital employed (ROCE)

  • EBITDA margin tracking

Quarterly board-style reviews—whether internal or with your accountant—help drive accountability and improve focus across the business.

3. Conduct a Strategic Tax Review

Mid-sized companies are often overpaying in tax due to inefficient structures or missed reliefs. We recommend reviewing:

  • Director remuneration strategy (salary, dividends, pension mix)

  • Business structure—group setup, VAT schemes, use of SPVs

  • Opportunities for capital allowances or R&D tax reliefs

  • Company car and benefit-in-kind efficiency

🔗 For tax efficiency schemes and reliefs, see GOV.UK – Corporation Tax.

An annual tax planning session can result in four- or five-figure savings—often enough to fund new hires or capital upgrades.

4. Review Payroll, Pensions & HR Compliance

Growing teams bring growing risk. Payroll errors, missed deadlines, or poor pension scheme management can result in fines and reputational damage. Consider:

  • Shifting payroll management to an outsourced specialist

  • Ensuring auto-enrolment staging and re-enrolment duties are met

  • Streamlining bonus and commission schemes with tax-efficiency in mind

  • Auditing HR policies linked to payroll and benefits

📌 A managed payroll service from Woodville ensures full RTI, pension, and payment compliance—with minimal disruption to your operations.

🔗 Learn more at The Pensions Regulator.

5. Prepare for Growth: Funding, M&A or Investment

Many businesses in the £500k–£1m+ range are on the cusp of their next chapter. Whether you’re seeking private investment, bank funding, or acquisition targets, your financials must be ready.

We help clients:

  • Prepare investor-grade management accounts

  • Identify key valuation drivers (recurring revenue, margins, efficiency ratios)

  • Model growth scenarios and funding requirements

  • Strengthen governance and internal reporting

🔗 For SME funding insights, visit British Business Bank – Finance Hub.

Work with a Finance Partner Who Understands Scale

At Woodville Accounting & Payroll Ltd, we don’t just crunch numbers—we help medium and larger businesses in Burton-on-Trent navigate complexity, drive profitability, and unlock future growth.

We specialise in supporting directors who are:

✔ Scaling up and need proactive financial oversight
✔ Frustrated with reactive accountants or disjointed advice
✔ Ready to streamline operations and boost cash flow

Let’s Get You Financially Fit for FY2025

 

Tel: 01283 819385 | Email: [email protected] 

Bretby Business Park, Ashby Road Bretby Burton On Trent DE15 0YZ

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Accounting and Bookkeeping Basics that every business owner that Every New Business Owner Needs to Know

Accounting and Bookkeeping Basics that Every New Business Owner Needs to Know

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Accounting and Bookkeeping Basics that Every New Business Owner Needs to Know

Starting a new business venture by yourself is incredibly exciting, but it can be daunting, too – especially when it comes to accounting and taxes. The sooner you begin to learn about accounting, the less likely you are to run into trouble, which is why we’ve put together a basic accounting guide for new sole traders, contractors and freelancers who need a nudge in the right direction.

Separate Business and Personal Bank Accounts

They say you shouldn’t mix business with pleasure and this is especially true when it comes to banking. It’s important to create a separate bank account for your business expenses and transactions, for several reasons.

Firstly, this creates a log of your business-related transactions. This saves you from having to comb over your records and try to remember whether each purchase was business-related or not when tax season rolls around. As a consequence, you’re less likely to miss out on tax deductions and end up paying more than necessary.

A separate business bank account makes it easier to monitor your cash flow situation and understand how much you can afford to spend. It also helps to maintain business credibility, which is important when seeking financing.

It’s also worth arranging a business credit card. Business credit cards typically have a higher limit than personal ones, which is useful since business expenses tend to be higher, too. This will help you to smooth out any cash flow issues you face without putting your personal credit score at risk.

Invoice Management

Invoice management is a simple but crucial part of effective cash flow management. Not only is it important to send invoices on time, with a clear itemised bill and the correct payment information, but you also need to be proactive about chasing up late paying clients, too.

Track Expenses

Invoice management is a simple but crucial part of effective cash flow management. Not only is it important to send invoices on time, with a clear itemised bill and the correct payment information, but you also need to be proactive about chasing up late paying clients, too.

Go Paperless

Of course, you will need to keep hard copies of certain important documents but going as paperless as possible is a great way to stay organised and make accounting easier. There’s really no need to store everything in a shoebox anymore.

Accounting software can do everything from generate invoices to storing receipts, eliminating your need for an overflowing filing cabinet.

Electronic payments are also much faster to process than old-fashioned cheques, which is great news for your cash flow.

Don’t Forget About Taxes

Employees with regular paychecks tend to spend a fairly minimal amount of time thinking about tax, but as a solopreneur you need to be much more proactive. For every invoice payment you receive, you need to set aside anywhere between 15-30% of that sum, depending on your annual earnings and business type. It’s important to be aware of this and budget accordingly so that you don’t receive a nasty surprise when the tax year ends.

Summary

Accounting and bookkeeping doesn’t have to be difficult. By staying organised, being proactive and taking a common-sense approach, you can overcome many of the common pitfalls experienced by new solopreneurs.

Being proactive about expense tracking and invoice management will give you a huge leg-up. By separating your personal and business accounts and using accounting software, keeping your records in order becomes far easier. 

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5 Common Tax Deductions that Small Business Owners Often Overlook

5 Common Tax Deductions that Small Business Owners Often Overlook

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5 Common Tax Deductions that Small Business Owners Often Overlook

They say that only two things are certain in life: death and taxes. Pay

Of course, in order to claim the following tax deductions, you need to be on top of your bookkeeping. Get into the habit of updating your records and file all of your receipts and invoices in a well-organised system.

1. Startup Expenses

Money is usually tight during the startup phase and every penny counts, but many small business owners overlook startup costs. Don’t assume that it’s too late to claim, either; in the UK, for example, limited companies can claim relevant startup expenses for up to seven years before the business officially begins operations. Just because you’ve been in business for a few years doesn’t necessarily mean that you’ve missed the boat.

2. Home Office Expenses

If a room in your home functions as your primary place of business then you may be able to claim a home office deduction. Expenses such as gas, internet and electricity will usually be deductible based on the percentage of your home used for work, and for how long. Therefore, it’s important to keep a record of how many hours you work each month in order to calculate this deduction.

You will also be able to claim expenses such as office furniture, although again you will have to calculate the usage portions. If you buy an office chair for £100 and use it exclusively for work, then you can claim the full amount. However, if you use it for personal reasons 30% of the time then you will only be able to deduct £70 from your taxable income.

3. Carryovers

Business owners often overlook capital and net operating losses as tax deductions. It’s possible to carry these losses over into future tax years to reduce taxable income. With so many small businesses suffering due to the covid-19 pandemic, this is definitely a deduction to make note of. Carryovers can be used to reduce either the business’ or the owner’s income. It’s best to speak to your accountant about how your business can best benefit from this type of tax deduction.

4. Losses on Bas Debts

If your business loses money due to a customer who won’t pay, an employee who quit after receiving advance wages or loans to clients that your business is now unable to collect then you may be able to claim this amount as a tax deduction. You will have to prove that you have taken reasonable steps to collect this amount but have been unable to do so. Of course, this situation is less than ideal but it may help to soften the impact of a bad debt.

5. Education and Training

It’s a good idea to invest in your employees and you should be able to deduct the cost of doing so. Many business owners overlook the fact that educating and training their employees is a deductible tax expense, so keep a careful record of your spending in this area to receive a smaller tax bill.

Summary

We would all like a smaller tax bill, so be aware of these often-overlooked deductions to ensure that you don’t end up paying more than necessary. It’s important to keep a careful track of all of your expenses so that you don’t miss out on any potential tax deductions. If you’re unsure about whether an item qualifies for tax deductions, be sure to speak to your accountant or bookkeeper so that you don’t end up making a costly mistake.

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How to Align Your Personal and Business Goals

How to Align Your Personal and Business Goals

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How to Align Your Personal and Business Goals

Knowing how to set business goals and align them with personal goals can increase productivity, profits, and employee motivation.

Business goals don’t always have to reflect the personal goals of the employees, nor those of the owners or management. However, if a company member starts thinking that their work doesn’t provide them with benefits or growth, their productivity and outputs may suffer.

A good leader and manager needs to have the company’s interest in mind, as its purpose stands above that of an individual. However, that becomes impossible when members don’t feel valued.

Setting the business goal in accordance with employees’ personal growth and plans will help them reintegrate into the office and keep productivity and morale high. These are some of the most effective methods for workforce alignment.

Tip #1. Know the Mission and Vision

The company’s vision is the ultimate goal and the purpose behind its existence. It serves as an imperative and puts the business as a timeless entity that solves a particular problem in society. The company’s mission, on the other hand, is the way it operates and how it plans to achieve the vision.

Keeping the mission and vision statements clear and easy to remember helps ground the employees, as well as the leaders, allowing them to become part of a well-oiled machine that provides the best service possible.

Tip #2. Make Goals SMART

In the business dictionary, the goals need to be SMART:

  • Specific
  • Measurable
  • Achievable
  • Relevant
  • Timely

Ensuring that all company goals and mission statements abide by these measures allows management to have an easy overview of how employees and the various departments perform against expectations.

SMART goals benefit from being easier to break down into component pieces, allowing for more straightforward task allocation, management, and reporting.

Tip #3. Focus on Goals Rather Than Incentives

Providing workers with incentives doesn’t give them a lasting benefit or change their way of operating within the company. These temporary solutions usually only hurt long-term performance and productivity by enforcing a culture of coercing employees to finish work to receive a reward.

Furthermore, incentives that are not worth the apparent effort will hurt the company’s standing as a worthwhile employer and may put off future clients. Upper management can also hurt profits if they dole out incentives for tasks that should be the norm.

Tip #4. Ensure a Good Cultural Fit

Employers have the final say on the formalization of company culture and statement. And employees who don’t align with these goals won’t further the company’s vision and may clash with management.

Properly vetting candidates for important business positions will ensure their goals align with both the leader’s personal goals and the company’s mission statement.

For example, an interviewee that looks perfect on paper but lacks the teamwork needed for the role probably won’t relish a team environment.

The Endgame

A company’s goal is usually relatively clear: achieve the vision and make a profit. However, employees’ personal goals can be different and more complex and thus, will need to be tackled on an individual basis for the business to succeed.

With proper management, transparent communication, and a goal-oriented culture, any company can accomplish growth and align members with its vision.

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Four Steps to a Successful Profitability Analysis

Four Steps to a Successful Profitability Analysis

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Four Steps to a Successful Profitability Analysis

Are you uncertain about the level of success you achieved?

There's a quick way to get an overview of your finances.

Not enough companies run a profitability analysis – a defining indicator of profit. Such an analysis relates to costs and overall revenue and it can provide insights into how a business runs.

The occasional analysis can also indicate if it’s time to make some changes.

Maybe some clients require too much time for the money. Perhaps there are other opportunities around the corner that you can jump on.

Either way, it should be on your list of tasks if you want to ensure long-term business growth. And here’s a simple blueprint to follow for a successful profitability analysis.

Step #1 Calculate Margins

Two of the most important variables in a profitability analysis are gross and net profit margins.

You can get the gross profit margin by knowing your sales revenue minus the cost of labour and other direct costs.

For the net profit margin, you must subtract all expenses from your revenue to get the magic number – the margin – and then divide the previous result by your revenue.

Don’t forget to look at the segment profits, too.

Odds are you offer a suite of services that each has its own revenue stream. Take the numbers for each segment, subtract the costs, and include overheads in your calculation.

If you do this, you get a more detailed insight into how money moves in your business.

Step #2 Perform Client Valuation

Here, you must look at each client and figure out how much each of them brings.

Performing a client valuation essentially means to determine the worth of each client. So, subtract from the revenue all of your costs, such as marketing, hourly labour, travel expenses, and so on.

After all, you want to find out the costs of keeping each client satisfied.

Some clients may not pay a lot for your services. But you may have a better profit margin with them if their projects take very little time from you or your team.

Maybe you have good cash flow. But it’s possible that when you draw the line, there’s not a lot of profit in it.

Step #3 Look at the Past Numbers

A thorough profitability analysis looks at past quarters over the years.

Why?

Although your current numbers may look good on paper, you need something to compare them to if you want to know where you stand.

Step #4 Benchmark Industry Ratios

Your numbers only mean something in the context of your niche. It’s because profitability numbers aren’t the same in accounting as in health care, education, e-commerce, etc.

If you look at your past and current numbers, you can figure out your business’s progress so far. But what about compared to your competitors?

What about your position in relation to the market?

Always be sure to check average industry ratios to give you a better sense of where your company is as opposed to where it should be.

Do it for Peace of Mind and Direction

A good profitability analysis can help curb anxiety when it comes to your business. At the same time, it can tell you what you should be doing to improve and grow it.

If you ever find your business lacking direction, remember that an analysis can help you spot issues that you couldn’t otherwise.

It’s a game changer.

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Three Tips for Streamlining Your Workflow

Three Tips for Streamlining Your Workflow

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Tips for Streamlining Your Workflow

Improper business workflow affects efficiency and performance in the workplace and can lead to a loss of profits.

Here are some tips on how to streamline the business workflow:

Streamlining business workflow, which is applicable across all departments, can be a universal process to save company resources and improve overall profitability and productivity.

A streamlined workflow will make it easier to put out a consistent product and develop uniform branding across different platforms. Also, employees won’t be overwhelmed due to project needs when given a set of clear procedures to follow.

Furthermore, unified processes for requests and complaints, as well as simple rules for project satisfaction will lead to smaller employee turnover, reducing the time spent training and explaining work processes.

All these benefits make it necessary for leaders and managers to take control and ownership over the workflow and make necessary changes and improvements to benefit the entire team and company brand.

Here are some of the best tips to streamline workflow and achieve better profits:

Streamlining business workflow, which is applicable across all departments, can be a universal process to save company resources and improve overall profitability and productivity.

A streamlined workflow will make it easier to put out a consistent product and develop uniform branding across different platforms. Also, employees won’t be overwhelmed due to project needs when given a set of clear procedures to follow.

Furthermore, unified processes for requests and complaints, as well as simple rules for project satisfaction will lead to smaller employee turnover, reducing the time spent training and explaining work processes.

All these benefits make it necessary for leaders and managers to take control and ownership over the workflow and make necessary changes and improvements to benefit the entire team and company brand.

1. Evaluate Current Processes

The first step in streamlining the workflow is proper documentation and evaluation of all processes that take place in the work environment.

It might sound counterintuitive, but some companies have processes that have grown too convoluted over time and without proper management, slowing down the rest of the company as a result.

Some of the essential data gathered in evaluations include:

  • Number of items initiated, completed, and rejected over a period
  • Average, minimum, and maximum times required to complete a task
  • Number of clarifications needed for a task

Additionally, soliciting the opinions and experiences of your employees in a survey can point to parts of the workflow that are creating unnecessary steps or bottlenecks.

Once a proper estimate of the current workflow is complete, focus on improving one problem at a time and testing it out before making further changes. A complete overhaul at once might prove to be as problematic as the original.

2. Simplify Processes

Overcomplicated processes can lead to errors and lack of clarity on the task at hand. A workflow contains many parts, but a process has a way of growing over time to encompass smaller ones, which can cause a bottleneck and reduce productivity.

Breaking down a complicated part of a workflow into its constituent pieces is the best way to streamline it. And keeping only the necessary steps will lower the risk of errors and improve productivity.

3. Automate

For some processes, automation is the best way forward. Menial and repetitive tasks are best left to automated solutions, as this can leave employees with more time to perform the more-vital duties instead.

Additionally, discreet, purpose-made software is less likely to make errors in carrying out mundane tasks and doesn’t need much monitoring.

Automation software often has a high return on investment, especially if you’ve put in the work to survey the market and find the best solution to the problem.

Work smarter, not harder

Streamlining the workflow of various company departments is only the first step in improving productivity. Bringing those departments together and improving cohesiveness and collaboration can be an equally important task.

Thankfully, online seminars and automation tools are widely available to help out in this aspect.

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How to Avoid Common Money Leaks in Your Small Business

How to Avoid Common Money Leaks in Your Small Business

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How to Avoid Common Money Leaks in Your Small Business

Money leaks in your small business

eat away at your profits without you even knowing about it. Even if your business seems to be in great financial health, you should regularly check for leaks to ensure that you’re not unwittingly wasting money. Plugging money leaks can help to reduce your spending and thus boost your profit margins without too much extra work on your part.

Here are the most common money leaks to look out for, and how to fix them.

1. Online Advertising

It’s easy to let advertising fees get out of hand. Social media pay-per-click fees may seem small, but they do add up and can present a significant money leak for your small business. Keep a close eye on any social media or Google advertising campaigns to ensure that you’re not running up a big bill. It’s also important that you regularly review the effectiveness of these adverts. If they’re not bringing in business, they’re a wasted expense.

2. Subscriptions

At some point, we’ve all signed up for a free trial with no intention to continue, then forgotten all about it and ended up paying. Other times, we stop using a service but forget to cancel the subscription. It’s all too easy to let your business leak money this way, but it all adds up. Review your subscriptions regularly and promptly cancel any that are no longer benefiting you.

3. Power Usage

Small mistakes like leaving the lights on overnight and forgetting to switch off devices may not seem like a big deal, but over time they can seriously eat into your profit margins. It’s important to get into good energy saving habits and encourage your staff to do the same.

There are many other ways to cut down on electricity usage, such as investing in insulated blinds or switching to energy-efficient lightbulbs. Although these changes do present an upfront cost, they will save your business a significant amount of money in the long term.

4. Office Supplies

It’s easy to go over-the-top with office supplies, so take some time to assess what is and isn’t necessary. Thousands of multicoloured sticky notes are fun, but they’re hardly a necessary expense. Furthermore, many businesses waste a lot of money on printing, which is easily avoidable in the age of cloud-based software.

5. Credit Card Fees

Being lax with your credit card payments is a surefire way to create unnecessary costs. By clearing your balance each month – or at least as much as possible – and paying attention to any annual or hidden fees involved, you can save your business money and boost your profit margins.

When signing up for a credit card, don’t get distracted by the attractive rewards. Make sure that you read the fine print and understand the fees before you choose a card. This will help you to use your card wisely and avoid any money leaks.

6. Smartphone Bills

If you’re not keeping a close eye on your smartphone bills, you could be paying a lot more than necessary. Make a habit of reviewing your charges every month to ensure that you and your staff aren’t exceeding your plans. Take a close look at your usage, too, because you could be paying for more than you’re actually using. It’s also worth shopping around regularly too to see whether or not you could benefit from switching plans or providers.

It Pays to Plug

By plugging these common money leaks, you can cut down on costs without making any real sacrifices. Regularly checking for leaks helps you to make your business budget go further, so make sure you don’t grow complacent. Get into the habit of regularly performing basic checks to maintain a healthy profit margin and prevent your business from losing money.

Money leaks in your small business eat away at your profits without you even knowing about it. Even if your business seems to be in great financial health, you should regularly check for leaks to ensure that you’re not unwittingly wasting money. Plugging money leaks can help to reduce your spending and thus boost your profit margins without too much extra work on your part. Here are the most common money leaks to look out for, and how to fix them.

How to Avoid Common Money Leaks in Your Small Business Read More »

7 Fatal Entrepreneurial Mistakes to Avoid

7 Fatal Entrepreneurial Mistakes to Avoid

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7 Fatal Entrepreneurial Mistakes to Avoid

Making mistakes is an unavoidable part of your entrepreneurial journey, but certain errors may prove fatal for your fledgling business. According to the USA Bureau of Labor Statistics, 20% of small businesses fail in the first year. Often, this is due to naivety or a lack of preparation. Let’s take a look at some of the most common and dangerous entrepreneurial mistakes so that you can avoid them and ensure that your business sticks around.

1. Failing to Get to Know Your Niche

When you’re full of ideas and enthusiasm, it’s tempting to skip the research step and dive straight into launching your business. However, the better you know your chosen industry, the more successful you will be. Take time to learn from your competition. Discover what it takes to succeed in your niche, and why others have failed. Understanding the industry will help you to position yourself appropriately in the market, predict trends and gain a competitive edge. Find out what works, what doesn’t and what you can do better. If you want to swim instead of sink, make sure you do your homework before diving in.

2. Ignoring Expert Advice

Gut instinct is part of entrepreneurship but that doesn’t mean you should ignore the advice of others. It always pays to listen to and learn from more experienced business people who can offer you valuable advice and insights. Being overly arrogant and thinking that you always know best is a sure fire way to tank your budding enterprise.

3. Cost-based Hiring

Ever heard the phrase “pay peanuts, get monkeys”?

A company is only as good as its people. When you’re first starting out, it can be very tempting to find staff who are willing to work for low wages, but even one bad hire can be a very costly mistake for your business. If you’re starting a business with a tight budget, it’s natural to want to keep costs low but remember that bad hires reduce productivity, tank morale and require you to spend even more money on a replacement hire further down the line. Invest in quality staff from the beginning and you’ll reap the rewards.

4. Neglecting the customer

Without customers or clients, you have no business to speak of. Ensure that you create all of your products and/or services with the customer in mind and create a customer-first philosophy to underpin your business. Repeat customers are your greatest source of revenue. Research by Invesp Consulting found that increasing customer retention by 5% boosts profits by a whopping 25-90% and acquiring a new customer is up to five times as expensive as retaining an existing one. It really does pay to put the customer first.

5. Setting Unrealistic Goals

It’s great to be ambitious, but it’s equally important to set achievable short-term goals to keep you motivated and maintain a sense of direction. Short-term goals are great benchmarks to measure your progress, as it can be more difficult to understand where you are in relation to a goal that’s months – or even years – away.

6. Neglecting Marketing

Unfortunately “build it and they will come” is not a good business philosophy. It’s essential that you invest in marketing for your start up. You can offer the greatest product or service in the world, but that doesn’t mean much if no-one knows about it. A good marketing strategy will help you to stand out from the crowd and be heard above the noise of your competitors. If you want to see healthy profits you have to invest in marketing.

7. Trying to Do Everything Yourself

Many entrepreneurs try to handle every aspect of their business by themselves. This is a mistake that not only leads to burnout, but also prevents you from completing tasks to the best of your ability. Knowing when to outsource and delegate certain tasks is key to your survival as an entrepreneur and the sooner you learn how to do it, the better. Outsourcing tasks such as admin, accounting and content creation will free up your time to concentrate on what matters most to you: growing your business.

Set Yourself Up For Success

Being aware of and avoiding the above entrepreneurial mistakes will set your start up in good stead for success. It’s great to be passionate about what you do, but remember not to jump in too quickly or ignore the advice or more experienced business people. Entrepreneurs are often caught up in their grand ideas and forget to pace themselves and focus on what really matters. By remaining mindful of the aforementioned mistakes, you can ensure that you stay in business for a long time to come.

At Woodville Accounting & Payroll one thing we do is help start-ups set up their business and finance function, while offering continued support with their business growth.

If you would like more information or to discuss any of the comments made in the above article then please contact us at [email protected] or complete our on-line contact form.

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5 start accounting firm near swadlicnote

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