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A new survey has revealed that the key threats to growth for small and medium sized businesses included failure to make a financial plan, misunderstanding cash flow and not setting aside capital to pay tax.

The research from an expert panel of Association of Accounting Technicians (AAT) accountants also found that worryingly, four in five SMEs have someone who is not in a qualified financial role managing their financial processes.

This in turn has resulted in potential average losses of around £15,000 a year.

AAT have created a check list for the UK’s smaller sized businesses that aims to encourage better planning and support growth:

  • Set up a reserve bank account for a ‘rainy day’.
  • Ringfence a percentage of regular income to pay for tax and VAT later in the financial year.
  • Spend strategically on investments that will deliver growth (e.g. marketing).
  • Find your business’ ‘hidden accountant’ – e.g. upskill a member of your staff in accountancy skills. However, it is best to have an external accountant to provide vital support.

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Adam Harper, Director of Strategy and Professional Standards at AAT, commented, “Effective financial planning is critical for SMEs as they often lack the funds to manage an unexpected crisis. There are a number of simple things every business can do to avoid some of the most common financial pitfalls, and free resources, such as the business advice website Informi, can prove invaluable in helping companies recognise areas in which they can improve their management of finances.”

He added, “We are advising SMEs to make use of finance skills as early as possible to help deliver sustainable growth. Businesses can engage an external accountant to provide vital support but should also consider looking for their own ‘hidden accountant’ – that colleague who is best placed to upskill and keep your business in good financial shape on a day-to-day basis.”

To find out more about contracting please contact James on 01442 795 100 or email james.trowell@dolanaccountancy.com.

Why Thousands of Contractors Choose Dolan Accountancy

With over 25 years experience in contractor accountancy helping thousands of contractors, freelancers and the self employed, Dolan Accountancy has the specialist skills, reputation and credibility you can trust.

Working closely with our sister company, Contractor Umbrella, it means we can offer one low cost, fixed fee package at £125 + VAT. This gives you the flexibility of using both our Limited Company Accountancy Services and our award winning Umbrella Service, for one inclusive cost.

If you’d like to find out more about how Dolan Accountancy can help you and your business, please give us a call on 01442 795 100 or email sophie.lewis@dolanaccountancy.com or jaime.thorpe@dolanaccountancy.com.

We don’t believe in tiered packages or hidden extra fees, instead we aim to give you everything you need, including:

  • Free Company Formation – This is where it all begins. Once you have decided on an available name, we will form your company free of charge (if using our accountancy services) and it will be ready for you to use in as little as three hours
  • Free use of Contractor Umbrella – With IR35 Legislation changes we understand that sometimes you are required to contract via an umbrella company. We will keep your limited company ticking over, while you work margin free via our sister company, Contractor Umbrella
  • A Dedicated Accountant – Your accountant will be there for any company or personal tax advice that you require. We will never outsource work, even to internal teams
  • Free Access to FreeAgent – We offer all of our clients access to FreeAgent, free of charge
  • Free Business Banking – We have decided to waive our commission so our clients can use Tide free of charge for the first year
  • Unlimited IR35 Status Reviews – We will review all of your contracts for IR35 purposes and provide you with our professional opinion as to its status
  • Free Registered and Director’s Service Office Address – Sometimes you just don’t want your home address on display at Companies House. When you sign up to our accountancy services, we will offer the use of our address as an alternative
  • Your Business and Personal Taxation Needs – This includes Company Accounts, Director’s Personal Tax Return, VAT Returns, Payroll, Corporation Tax and Dividend advice, to name just a few
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