Managing your finances
A vital part of running a successful business is looking after your finances. When they’re put together in the right way, the numbers paint a detailed picture and tell stories about your business. This section explains what is involved in financial management and introduces you to the basic financial statements.
Your cashflow shows the amount of cash coming in and going out of the business each month. It is a critical planning and management tool for the business. This section explains the cashflow forecast in detail, shows you how to create a cashflow forecast and how to use it to plan and manage your business.
A Profit and Loss Account shows the financial performance of your business over a specific period. It is used by HM Revenue and Customs to check your calculations for tax and by potential investors to understand how the business is performing. This section explains the Profit and Loss Account in detail and provides you with an example Profit and Loss Account.
Forecasting sales is an important part of business planning. You can use the information to develop your cashflow forecast and budget effectively. This section looks at the different methods of forecasting, shows you how to create your sales forecast and how to calculate your break-even point.
A Balance Sheet gives you a snapshot of the financial state of your business at a given point in time. It is used to assess the value of your business and to work out the ratios which evaluate business performance. This section gives you an overview of the Balance Sheet and also explains the most helpful ratios for your business.
Value Added Tax (VAT) is a transaction tax charged on the sale of goods and services. This section explains who has to pay VAT and how to account for it.
The importance of good financial management is emphasised throughout this module, The key elements of running the money side of your business are highlighted. This section provides a checklist to help you manage your finances effectively.
A vital part of running a successful business is looking after your finances. When they’re put together in the right way, the numbers paint a detailed picture and tell a story about your business. This section reviews the key elements of running the money side of the business.