Running a small business can be tough - there are many challenges that small business owners face daily. However, maintaining accurate and consistent financial records doesn’t need to be one of them - and it’s a great way to help your business grow. Bookkeeping is the area of accounting that deals with recording financial transactions, and it can play a vital role in the success of your business. In this blog post, we will discuss five ways bookkeeping can help your small business grow. Track your finances One of the primary reasons to keep accurate financial records is to track your finances. With bookkeeping, you can see how much money is coming in and where it's going. This will help you make informed decisions about your business's future. You can look at your financial statements and easily identify trends, such as increasing expenses or declining profits. This information will enable you to adjust your business strategy accordingly. Manage cash flow Cash flow management is an essential aspect of running a successful business. Without sufficient cash flow, your business may not survive. Bookkeeping enables you to track your receivables, payables, and all other financial transactions. You can also forecast your cash flow based on your current financial position, helping you to avoid shortfalls in the future. Make informed decisions With accurate financial records in place, you can make informed decisions about your business. You can analyze your financial statements, identify areas that need improvement, and implement changes that will help your business grow. For example, if you identify that your expenses are increasing, you can explore ways to cut costs. Alternatively, if you notice that your sales are declining, you can develop new marketing strategies to attract more customers. Prepare for tax season As a small business owner, preparing for tax season can be stressful. However, with bookkeeping, you can simplify the process. By keeping accurate and organized financial records, you can file your taxes quickly and accurately. This will save you time and reduce your stress levels. Additionally, you can take advantage of tax deductions and credits that you may be eligible for, reducing your tax liability. Plan for growth Finally, bookkeeping can help you plan for the growth of your business. By tracking your finances, you can identify areas that are performing well and invest in them further. Additionally, you can analyze your financial statements to identify areas of your business that need improvement. By doing so, you can make adjustments to your plans and strategies to ensure your business grows in a sustainable and profitable way. Conclusion In conclusion, bookkeeping is essential for small business owners who want to grow their businesses. By tracking your finances, managing cash flow, making informed decisions, preparing for tax season, and planning for growth, you can build a successful and profitable business. Accurate financial records can help you identify opportunities, avoid risks, and make strategic decisions that will benefit your business in the long run. If you haven't already invested in bookkeeping, now is the time to do so. Your business's success may depend on it. Are you ready to take your bookkeeping to the next level? Book a free call with us

The Power of the Year-End Review As we approach the end of another incredible year, it's time to reflect, celebrate achievements, and set our plans for the future. At Valorem, we’re proud to work with all different types of clients, and whether you’re a creative entrepreneur, a passionate freelancer or a proud business owner who feels that maybe 2023 could have been better, an end-of-year review is a great way to reflect on what worked, what didn’t work, and what’s next. In this article, we’ll share our ideas for conducting a year end review for yourself, and of course, if you need our support with the financial part, we’re here to help and ready for your call. Celebrate your wins Do you remember your first sale? How about the moment you hit the VAT Threshold? Every win in business deserves celebration, and the end of the year is a great way to look back on just what you achieved - even if it wasn’t planned, and even if seems like a tiny win. Celebrating your wins is a morale booster, it keeps you motivated and focused, and your wins are probably closely connected to the reason you are in business in the first place. Learn and evolve Ok, 2023 wasn’t a walk in the park. And just like life, running a business can be a bit of a rollercoaster. Your end of year review gives you a great opportunity to assess what worked well and what can be improved for the future. Take a look into your numbers and see where things went brilliantly as well as those areas that might benefit from a change of strategy. Your numbers tell a story, and the insights you glean from a review can have a meaningful impact on your decisions for the future. Set goals for the future And we’re not just talking business goals, we’re talking personal too. Your business’s success isn’t just about spreadsheets and profits, it’s about building a business that meets your personal goals. Did you really have the year you hoped for personally? What could be better next year? Your bookkeeper can help you make sense of your numbers so you can focus on how they help you achieve your life goals. Take control of your finances Many business owners simply don’t review their finances, but as you’ve read this far, we’ll assume you’re not one of those people. It’s easy to bury your head in the sand when it comes to your finances, if everything’s paid on time, it can be tempting not to look any deeper, but taking some time to conduct a year-end-review is a great way to start as you mean to go on. what ever happened up until now, having a view of where you are right now, means you can take control of your finances for the future. A solid financial foundation is the backbone of your business, and we’re here to help. Seeking support is never a sign of weakness. You do you’re thing, and we’ll do ours. Reach out to your bookkeeper as your go-to partner for all things financial, and we, for one, would love to support you in conducting your own end-of-year review, to discuss your goals, address your concerns and discuss new ways you can grow your business in 2024. Whether the calendar year end is the same as your financial year end or not, this time of year is a great time naturally to sit and take a look at exactly what’s going on behind the spreadsheet. As we wish 2023 farewell, we’d love to raise a toast to you and your business and a new year of exciting growth.

For small business owners, tax season can be a stressful and daunting time of year. It makes sense that you’d rather not think about it, but as a bookkeeper, every year I see business owners feeling stressed as the season approaches because they know deep down that rushing things and leaving it to the last minute can lead to mistakes and penalties. That’s why it makes sense to get ready for tax season right now. In this blog post, we’ll explore why now is the time to get your self-assessment tax return done, instead of waiting until the deadline of January 31st. We’ll offer tips on how to outsource your bookkeeping, why the deadline is not a target, and how it’s crucial to know your numbers to help motivate you to complete your tax return. You don't want to be doing your tax return over the holidays. It's no secret that the holidays are a busy time of year - especially for small business owners. With the added pressure of balancing work and family commitments, it's easy to put off sending your tax return until January. However, with the deadline of January 31st fast approaching, don't let yourself end up cramming your tax return in over the holiday period. Instead, tackle it now and enjoy a stress-free break. The deadline is a deadline, not a target. Many small business owners falsely believe that the filing deadline of January 31st is a "target" rather than a firm deadline. This could not be further from the truth. The HM Revenue and Customs (HMRC) takes non-compliance very seriously, and failing to submit your tax return by the deadline could result in a fine. Get it done and off of the list as soon as you can. Outsource your bookkeeping so you don't need to do it. One of the best ways to get your tax return completed now is to outsource your bookkeeping. If you don't have the time or expertise to handle this task in-house, think about getting the help of a professional bookkeeper or accountant. Outsourcing your bookkeeping can not only save you time and energy, but it can also help you stay organised and ensure your tax filings are completed accurately and on time. Here’s the unexpected benefit Many small businesses see the tax return as the ultimate goal, but at Valorem Virtual Finance Ltd we know that the most important reason to get your tax return completed now rather than later is to know your numbers. It gives you time to save for your tax bill if you haven’t already (talk to me about this, I can help), and it is key to knowing your numbers. Your tax position reflects your business performance for a certain frame of time, and we expect you want to know how you’re performing in as near to real-time as possible. Understanding your financial situation is vital in running a successful small business. By knowing your financial figures in-depth, you can make informed decisions for your business, plan for the future, and stay on top of your finances. Conclusion Getting your tax return done as early as possible is crucial. Of course, this avoids unnecessary added stress, mistakes, and penalties, but it means you have feedback on how your business is doing. At Valorem Virtual Finance Ltd we encourage our clients to file their tax returns as early as possible and we’d love to chat to you about how we can help you with yours. You can reach out to us by emailing us at hello@valoremfinance.co.uk So why wait? Let’s get your tax return sorted now so you can move on to more exciting things.

Are you using artificial intelligence? As we see artificial intelligence (AI) more and more in daily life, we’re also hearing debates and speculations about its potential to replace traditional professions, including bookkeepers and accountants. While AI is indeed transforming the finance industry, the question remains: will it do finance professionals (like me!) out of a job? In this blog post, I’ll discuss the impact of AI on accounting, discuss the ways in which AI can help bookkeepers and accountants, and give you my view of the future of these professions. AI for Accountants AI is hot on the agenda at every accounting event right now. We’re seeing changes behind the scenes with the software we use, with numerous tasks being automated and much better real-time insights into financial data. Here are some ways AI is reshaping the accounting profession: Data entry The biggest change right now is the potential for AI-driven software to simplify data entry by automating processes, and reducing or even removing the need for manual data input. This saves time for bookkeepers like me and minimises the risk of human error. Improved accuracy AI tools can identify discrepancies and inconsistencies and spot patterns in data - including financial data. AI has the potential to maintain and even improve levels of accuracy, giving us even better insight into your numbers and more opportunity to talk about what matters to you - reaching your goals, and the power of your numbers to allow you to do that, which leads us to… Real-time insights When we spend less time fussing with accuracy because AI is doing that for us, we can quickly get stuck into the insights you need into your company’s financial health. This allows you to make informed decisions promptly. Time efficiency Automation of routine tasks frees up time for accountants and bookkeepers to focus on more complex financial analysis, scenarios, and strategic planning. So, will it replace us? You’ll notice that the role of AI as we see it is focused on speeding up and improving the accuracy of what a bookkeeper or accountant would traditionally spend the majority of their time doing. This is important to remember. I see AI as a valuable assistant, not a replacement. While AI is a transformative force in accounting, it is not poised to replace bookkeepers and accountants. Here's why: Human judgment Accounting and bookkeeping often involve subjective decisions and judgment calls that AI simply cannot make. Human professionals will always be important for interpreting financial data, understanding the context within the specific business, and having real conversations with you, the business owner. Relationships At Valorem Virtual Finance Ltd, earning your trust through real communication and relationships matters to us. When it comes to finances, you need somebody on your team to run queries past, and AI can’t replicate that. Data is data, but we’re here to address your concerns, know your goals and help you reach for them. Adaptability As humans, we can adapt quickly to unpredictable scenarios… if you remember everything the country went through during 2020, you’ll remember just how quickly we were able to interpret, respond to and implement every update from the Chancellor. AI may struggle to adapt to rapidly changing financial landscapes and handle unique, complex situations. Security and ethical considerations And this is the big one for me. As a professional accountant, ensuring compliance with financial regulations, security of data, and maintaining ethical standards is crucial. We would never put your data at risk and we’re keeping a constant view of developments of the software we’re using and how they incorporate AI. AI-based accounting software, when properly developed and implemented, can be highly secure. These accounting softwares often use encryption and other security measures to protect financial data. However, the level of security can vary depending on the software provider and the software configuration. We see this as a risk, and for this reason, only work with reputable software providers. This topic is high on the agenda of every accounting and bookkeeping event, it’s an area that is moving fast and which we’re watching closely. Conclusion While AI is reshaping the accounting profession by enabling software to automate some tasks and provide better insights into patterns and inaccuracies, AI is not poised to replace bookkeepers and accountants. AI should instead be seen as an assistant that will enhance services in the future allowing us to give you better data and insights, but the vital human touch is still crucial. The future of accounting and bookkeeping is certainly a relationship between human expertise and AI innovation, bringing the best of both worlds, but you can rest assured, that I’ll always be here.

School holidays can be tough on small business owners. Balancing work and holidays can be tricky, especially when you and your team want to take some time off with family. You want to be able to keep the business running smoothly while getting some time out. That's where hiring a bookkeeper comes in. As a small business owner, you might think that you can’t afford to outsource bookkeeping tasks, but a bookkeeper can save you time, money, and stress. Here’s how. A good bookkeeper helps you stay on track with your finances Regular bookkeeping is important, even if you think of yourself as just a small business. Your bookkeeping is the foundation for monitoring your sales, expenses and profits, but also your cash flow and your progress against your goals. Hiring a bookkeeper during the holidays means you can keep track of your finances while you're gone. A professional bookkeeper can record and reconcile transactions, process invoices and payments and handle payroll for you. They can also identify potential bottlenecks in cash flow and spending patterns to help you adjust your budget accordingly. Additionally, a bookkeeper can also help you prepare financial statements and tax returns, saving you from returning to work knowing you have to quickly turn around a VAT return. A good bookkeeper provides valuable business advice Your bookkeeper is also a business owner, and a great confidant for discussing your business goals and challenges. A good bookkeeper can help you identify areas where you can save money and make suggestions for increasing sales. They can also help you identify potential problems in your cash flow. It’s hard to delegate when you want to know everything about your business, but imagine the peace of mind of having a finance expert’s eyes on your business while you’re taking a holiday. A good bookkeeper helps you prioritise your workload During the holidays, there's always a temptation to either do nothing or keep working and not spend time with your family. You didn’t start your business so you could become a bookkeeper, and engaging a bookkeeper to handle your financial tasks can help you prioritise your workload so you can just do what you need to do, and enjoy time with your family. A good bookkeeper saves you time and money It’s hard to think that hiring an additional person into your team is going to save you money, but bear with me. Engaging with a bookkeeper to handle tasks that aren’t your specialist area will save you time and money, and here’s how. Not doing these tasks yourself will free you up for the work you’re really meant to do in your business - where there’s a much better return on your time investment. Compare hiring a bookkeeper for £500 per month with [THE ACTIVITY YOUR IDEAL CLIENT COULD DO INSTEAD] generating £5000 per month [CHANGE THE VALUES AS APPLICABLE]. Are you better off to forgo the £5000 and spend your time bookkeeping, or to earn an extra £4500 in your business this month? How about if you took half of that time you would have been doing the bookkeeping off as holiday instead? You’d still be £2000 better off this month - just by hiring a bookkeeper. This is maths that makes sense. Add to this how a bookkeeper can usually save you costly mistakes in your bookkeeping and you’ll never question the value of a bookkeeper again. A good bookkeeper gives you peace of mind Knowing that a professional bookkeeper is managing your finances not just while you’re away but every day of your business gives you limitless peace of mind. You can always be confident that your business finances are up to date and in good hands, so you can get on with running your business armed with the information you need to make good, timely decisions. Conclusion Hiring a bookkeeper isn’t just a good move for the summer holidays, it’s a great move for the life of your business. It allows you to focus on what you really need to do as a business owner and take a break while everything financial happens smoothly behind the scenes. You don't have to worry about falling behind in your financial tasks, and you can trust that a professional is managing your finances. By leveraging the expertise of a bookkeeper, you can focus on spending quality time with your family and return to your business recharged and ready to tackle new challenges.

Lets break this down...

What even is VAT and how does it affect me?

What is a Tax Code and Why do I need to Know about it?

Welcome to our blog, where we, as experienced accountants, aim to empower you with the knowledge and tools to achieve financial success. Whether you're a business owner, a working professional, or an individual looking to manage personal finances more efficiently, this post is your key to unlocking the secrets of financial mastery. Setting Financial Goals: Before we dive into the nitty-gritty of numbers, it's crucial to establish clear financial goals. Whether it's building a stable retirement fund, paying off debts, or growing your business, well-defined objectives provide the direction needed to develop a robust financial strategy. Budgeting for Success: Creating and sticking to a budget is the foundation of financial management. We'll discuss the importance of tracking income and expenses, identifying areas for improvement, and ways to allocate resources effectively. A well-planned budget can be your ticket to achieving both short-term and long-term financial goals. Embracing Technology: In the digital age, technology can be a game-changer for accountants and their clients alike. From cloud-based accounting software to mobile apps that streamline expense tracking, we'll explore the cutting-edge tools that can save time, reduce errors, and enhance financial decision-making. Tax Planning Strategies: Taxes are an inevitable part of life, but they don't have to be a burden. We'll share effective tax planning strategies that can help you minimize tax liabilities and maximize deductions, ensuring you retain more of your hard-earned money. Financial Reporting and Analysis: For businesses, accurate financial reporting and analysis are crucial for making informed decisions. We'll explain how financial statements like balance sheets, income statements, and cash flow statements can provide valuable insights into a company's financial health. Avoiding Common Financial Pitfalls: As experienced accountants, we've seen common financial mistakes that can derail progress. We'll highlight these pitfalls and offer actionable tips to avoid them, helping you stay on the path to financial success. Understanding Credit and Debt: Credit and debt play significant roles in financial well-being. We'll explain how credit scores impact financial opportunities and offer tips on managing debt responsibly to achieve financial freedom. Conclusion: Becoming a master of your finances is a journey, and as accountants, we're here to guide you every step of the way. By setting clear goals, budgeting wisely, harnessing technology, employing tax strategies, making smart investments, and avoiding common pitfalls, you can unlock the door to financial success. Remember, achieving financial mastery is not an overnight process. It requires dedication, discipline, and continuous learning. As you put these principles into practice, you'll find yourself better equipped to navigate the complexities of the financial world and create a prosperous future for yourself or your business. Stay tuned for more insights and tips from our accounting experts. Happy accounting and here's to your financial success!

Running a sole trader business in the UK can be an exciting venture, but it also comes with its fair share of challenges, especially when it comes to managing finances and taxes. As a sole trader, you are the sole owner of your business, responsible for all its operations and finances. To shed light on this subject and provide valuable insights, we've put together this blog post to answer some common questions about running a sole trader business in the UK. What exactly is a sole trader business? A sole trader business is the simplest form of business structure in the UK. It means that you are the sole owner and operator of your business, with full control over decision-making and profits. Unlike other business structures, there is no legal distinction between you and your business, making you personally liable for any debts or legal issues the business may face. Do I need to register my sole trader business with the authorities? Yes, as a sole trader in the UK, you are required to register your business with HM Revenue & Customs (HMRC) for tax purposes. You must also register for self-assessment and Class 2 National Insurance contributions. What are the tax implications of being a sole trader? As a sole trader, you are required to pay income tax on your business profits. Additionally, you must pay Class 2 and Class 4 National Insurance contributions on your earnings. It is vital to keep accurate records of your business income and expenses to ensure you pay the correct amount of tax and avoid any penalties. Are there any tax benefits to operating as a sole trader? Operating as a sole trader offers some tax advantages, such as simplicity in accounting and reduced administrative burden compared to other business structures. You can also claim certain allowable expenses, reducing your taxable income. However, it's crucial to understand the implications fully and consult with an accountant to maximise these benefits legally. How can an accountant help me manage my sole trader business finances? An accountant plays a crucial role in helping sole traders navigate the complexities of financial management and taxation. They can assist you in maintaining accurate financial records, preparing and filing your tax returns, and offering valuable advice on tax planning and deductions. Their expertise can save you time and money in the long run, allowing you to focus on growing your business. What expenses can I claim as a sole trader? Sole traders can claim various expenses to reduce their taxable income. Common allowable expenses include business-related travel costs, office supplies, equipment, marketing expenses, and certain business-related subscriptions or memberships. However, it's essential to ensure that the expenses you claim are genuinely for business purposes and are supported by appropriate documentation.More info can be found on our sole trader tips page. Conclusion Running a sole trader business in the UK offers numerous opportunities, but it also requires careful financial management and adherence to tax regulations. Seeking advice from an experienced accountant can prove invaluable in navigating the complexities of financial planning, tax compliance, and maximizing your tax benefits. Remember, accurate record-keeping and staying updated with tax regulations are crucial for the success of your sole trader business.