We did a straw poll today in the office of the top 3 numbers that most business owners want to know in their accounts.
The results…
1. PROFIT
As in, profit before tax. Profit is the result of income less expenses and the number that most people want to know. Through various accountancy adjustments, profit can go up and down but it tells you whether you are making money or not
2. TAX
Corporation tax is 20% of your profits. Reduce your profits and you will reduce your tax. Corporation tax has to be paid 9 months and 1 day so the quicker you get your accounts done the more time you have to plan because if you have made profits, a corporation tax can rip a hole through your cash flow.
3. NET ASSETS
OK. Nobody really knows what ‘net assets’ actually means but it can be defined as ‘how much more money can I take out of my company’. It’s the number at the bottom of the balance sheet (actually shown twice on the balance sheet). This number is the number you can take out. The one problem is that you need to physically have the cash in the account to take out.
