Enterprise Lecture VIII//STASH YOUR CASH!

Enterprise Lecture VIII//STASH YOUR CASH!

Looking after your money 
Notes from today's lecture programme with Bridget March

ACCOUNTING

- Keep track of who owes you money.

- See how much you are spending on materials and services.

- See the money going in and out.

- Make sure you don't spend more than you earn.


INVOICES AND STATEMENTS

- Inovice: The bill.

- Statement: The reminder.

- An invoice details exactly what has been purchased- whom it's to, and whom it's from (VAT is always listed separately), and with a grand total. 


ESSENTIALS OF AN INVOICE


- Your business address.
- Your customer's address.
- The date of the invoice.
- Item by item details of the service or product provided.
- Total amount due.


ESSENTIALS OF A STATEMENT

- Your business address.
- Your customer's address.
- A list of recent invoices you have sent out.
- Details of invoices paid and unpaid.
- Total amount outstanding.


TERMS AND CONDITIONS

- Designed to protect your rights and interests.
- Costs.
- Delivery arrangements.
- Payment terms- might refer to all kinds of short hand in correspondence ("the owner=... Currys" [eg]), terminology used which the customer may not fully understand- explained on the back of invoices. Also detailing any return costs, owning the property of the product until it is delivered, the copyright of any project, explaining how you want to be paid, etc.

- Credit limits.
- Your rights to charge interest on overdue amounts and claim compensation for recovery costs.
- A commitment to quality.
- Data protection.




THE STATEMENT

- Send out on day before the due date.
- Send out every month thereafter.
- How much is owed.
- How long it has been outstanding.
- A call to action.


ACCOUNTING SOFTWARE


- Bank Tree Personal Finance (£26)- personal finance, no invoices or statements, but will keep a track of all finances, and will keep a record annually.
- Quick Books (£75), Western, standardised kit. 
- Online Quick Books essentials (£19/month)- invoicing and statements.
- Sage (£240)- Newcastle company, now with worldwide reputation, excellent, simple to use, full support.


ACCOUNTANT

- Chartered (NO), Very expensive.
- Certified (YES)

Always ask for a quote in advance to ensure you get the best deal.

WHAT BUSINESSES SPEND MONEY ON

- Start up costs.

- Overheads.

- Direct costs.

START UP COSTS

- Spend cash on new equipment.
- Design web site.
- Register company name.
- Design logo- make signs.
- Decorate premises.
- Launch party.

- Many companies get a loan to cover these initial expenses.
- Pay back each month over 2-3 years.




WHERE DOES THE MONEY COME FROM?


- BANKS//Barclays, Natwest, HSBC, Lloyds (Not loaning very much money to the creative industries at the moment- not able to expand without the help of them).
- CROWD FUNDING//Find them online (opening up the company to support for a small 
percentage/shares or grants).
- Funding organisations and investors.
- Prizes and awards.




WHAT DO INVESTORS WANT TO KNOW?


- Marketing plan.
- How much money do you need?
- How much money have you got?
- How will you spend the money?
- How will you pay the money back?




INDIRECT COSTS


- Utilities- gas, water, electricity.
- Office supplies.
- Bank charge.
- Etc... 




THESE REGULAR PAYMENTS ARE ALSO KNOWN AS:


- Overheads.
- Fixed costs.
- The cost of doing business.




DIRECT COSTS


- A cost directly attributable to the manufacturing of a product.
- Or, what the customer takes away with them.




INDIRECT COSTS

- What put the great % onto sale cost.




TANGIBLE ASSETS


- Assets having a physical existence and that maintain a substantial value.




NAME SOME INTANGIBLE ASSETS


- List of customers.
- Brand name.
- Reputation.
- Goodwill of the customers (through customer lists).




WHAT IS THE DIFFERENCE BETWEEN COST AND PRICE?


- Cost is what you spend.
- Price is what you charge.




CAPITAL


- Money, property and values collectively representing wealth.




CAPITAL ASSETS


- Valuable such as song royalties- potential asset earnings.




RECIEPTS (How much you receive from a client).
PAYMENTS (How much £ you spend running the business).
CASH FLOW/NET FLOW  (Cash receipts minus cash payments- positive/negative cash flow).




TAXES


- Income.
- Council Tax.
- VAT.
- Corporation Tax (for Ltd companies).
- Business Rates (Business building tax).




WHAT TO DO (START UP)


- Open up a separate business bank account.
- Find a certified accountant.
- Find a local solicitor.
- Register your business with the Inland Revenue.




USEFUL SOURCES


- Business Link.
- Startups.
- HM Revenue & Customs
- Creativechoices