Do You Know How Much Profit You Make?
Its our VAT quarter and that time again where we have to work out everything we’ve taken and everything we spent, so that we can have the privilege of taking taxes for the UK Government! So we’re busily printing off all these receipts, double checking things etc…
What this exercise does do for you however (if not ironic we have to pay someone ie our accountant to collect taxes that we don’t want to collect on behalf of someone else ie the government!) is that it gets your accounts up to date every few months rather than waiting an entire year to do things by which time you would have most certainly forgot what you spent that £250 on 10 months ago!
Its so important to know not just what sales your making every week and month but to know what your costs are as well. If you don’t, you could actually be working for free! You may then only realise this when you can no longer afford to pay your bills…
This is why its important to at least do monthly accounts, so that you can see how sales for the month are against your average, last month and the same time last year. Then you need to make sure your costs are consistent and if they are increasing, why?