How to Financially Safeguard Your Business

The first step is to get an accountant to assess the value of your assets, liabilities and surplus, this will give you a rough idea as to where you are in terms of finance. Your liabilities are all those costs that do not relate to your tangible assets (which include your buildings, machinery etc). The “net worth” of your company is the current market value of all its equity including, where necessary, the amount you personally own and the same applies to the shares you own in the business. If you own a large amount of stock then you should make sure you have it insured.

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Your surplus is all those money assets that your business generates in more than it spends. One example of this is machinery you buy that you don’t use, the value of this item is zero. You need to put this money into a separate account called an operating surplus.

A staggering percentage of UK businesses have no financial safeguarding. Make sure you’re not one of them and get advice from a Cardiff Financial Adviser like Jon Purnell

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You can also use dividends to reduce the cost of running your business. A dividend is a return on your company’s equity, which can be paid either annually or semi-annually depending on your register document. As part of your annual register document you should declare the type of income you make (revenues or capital gains). A business that has an active membership in a trade organisation is also likely to pay a small percentage (some businesses call this a membership dividend and it’s usually tax-deductible).

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