The importance of bookkeeping is crucial to your business success…and it doesn’t need to cost much, either. If you don’t look at your profit and loss until the end of the year, then you may have been losing money for the past 12 months and the “bleeding” may now have turned into “hemorrhaging”.

Trades especially are vulnerable in this area as they perceive great compensation for the project but underestimate the true value of labor and materials required. Find a bookkeeper that will accept your receipts every two months and keep you profitable.

This is a must. Any income NOT deposited to your business bank account could be perceived as your personal income and would then be taxed at your personal tax rate. A business bank account and its fees are an expense to your business and can be deducted within your business taxes.

Get some impartial advice from your accountant before you consult the bank. A bank will want to see a strong business plan. Consider raising equity finance (sharing the risk and rewards by selling shares in the business) but if you go down this route be prepared to grant outside shareholders a stake in the business.

Think through the alternatives to getting more finance. For instance, you might have assets against which finance could be raised, such as factoring debtors. Maybe you could manage the stocks and debtors better to free up cash? A hard look at the cash flow can pay dividends.

Could you release cash from underperforming assets? Reduce costs in general? Look also at improving the profitability of your products or services to generate more cash. If none of the above is enough and there is still a gaping hole in the finances, make sure there is a strong business plan to present to the bank

Business will be taxed on its profits, correctly working out what your business has spent is just as important as how much money has come in. Strict rules govern what can and cannot be counted as a business expense. These include the cost of any goods or materials bought as stock and then resold, rent and running costs for premises, marketing costs, costs of travel to see customers, and general running expenses such as postage and telephone.

If you work from home you should be able to claim a percentage of the cost of such things as telephone for business calls etc. Your accountant can help you decide the proportion of costs to go against tax. Costs which are not allowed include personal expenses such as travel to work, clothes or living expenses and fines such as parking tickets. The costs of buying equipment or premises are not allowed as business expenses but are covered by the capital allowance system. Keep records of all income and expenditure in order to fill in your tax return each year.