Is your quarterly VAT return your favourite task in your business? Does it all run like clockwork every quarter? Yes? Stop reading and consider a career in bookkeeping!
If the answer is no, there is help available to reduce the stress. Whatever your current bookkeeping and accounting set up, it’s useful to periodically check if it’s working well for you. This can save you money as well as stress.
Here’s a few tips on what to consider based on our years of experience with motor trade clients:
There’s a lot of it flying around a garage: parts orders, supplier invoices, customer invoices, not to mention employee paperwork if you have staff. You MUST keep adequate records for tax and end of year accounts.
Good records will also help you monitor your profitability and cashflow. A bookkeeper will help you organise your paperwork and send it on to your accountant in good order, so they may even reduce your accountancy fees.
2. Cashflow & credit terms
Poor cashflow is the most likely thing to ruin a small business. Even if customers usually pay when they pick up the car, what about more profitable corporate customers? Also consider supplier payments: how do you know which parts you can afford to keep in stock and which to order only when you need them?
If you want to grow your business you need to stay on top of what money you have going out (staff costs, overheads, supplier costs) and what is coming in. You can’t make good hiring or equipment purchasing decisions without it.
3. Profit margins
Obviously you want your business to make a profit. The best way to do this is to set realistic profit margins for areas of the business. These are usually split into profit margin on parts and profit margin on labour. Monitor whether or not you meet your targets and look for ways to save money / increase your charges if you don’t.
A good bookkeeper can help with setting realistic targets, based on your financials and the market. They can also help you with monitoring your profit margins and recommending action to increase your profit.
If you’d like a bit of advice, give us a call!
Get your record keeping running smoothly so you can focus on looking after customers and keeping your business profitable.
We’re always happy to chat over a coffee to see if we can help. We don’t charge for an informal chat and if we think you’re fine as you are, we’ll be honest and tell you that. Call or email Diane on 01825 763378 or firstname.lastname@example.org to get in touch.