Running any business is a cyclical activity. That cycle might be weekly, monthly, or annual, but its various activities create a rhythm that establishes a structure and framework for measurement and growth.
As a business grows and develops, a company can put itself under significant strain. Understanding what existing resources can cope with month on month in terms of servicing sales gives an organisation the insight and knowledge to predict future resource needs and plan investments accordingly.
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Goal setting within specific time frames
The accounting year establish fixed dates that focus the mind and give a management team specific goals that need to be achieved within specific time frames. The tax year typically runs from 6th April to 5th April the following year, and this rhythm has been the beating heart of businesses for generations.
For those who are self employed it is crucial to make a note of the deadline for self assessment tax returns – The penalties for retuning these late can add up to significant amounts if left unreturned. There are different dates for submitting your self assessment tax returns depending on how to prepare them. For example, if you still prepare them the old-fashioned way on paper, then the deadline is 31st October. However, HMRC is encouraging everyone to move to an online based system, and the final deadline for both filing and paying is 31st January.
Splitting the year into four via VAT
VAT is another of those cyclical events that come round very quickly every one or three months. When you register for VAT you have the option to choose to pay your VAT monthly or quarterly. Although quarterly is the most common, what you choose may depend on the nature of your business and your predicted cash flow.
The monthly scheme requires you making payments towards your VAT bill each month based on your last return. You can then reconcile this at the end of the year and then make a final payment or apply for a refund. This is a better way for companies turning over less than £1.35 million a year which does not have many expenses to claim back the VAT.
However, if your business claims VAT on purchases and expenses then your cash flow will not cope with an annual scheme that requires a monthly payment, as any rebate won’t be paid to you until the end of the year. A quarterly cycle would work better for you will help you protect your cash flow.
Businesses turning over more than £1.6m have to stick to a quarterly VAT regime.
Also read: Tips from Financial Advisors: Ways to Reach the Top
Important dates in the marketing calendar
Beyond key accounting dates, an organisation needs to make sure it follows important marketing dates relevant to their business activities. The most obvious dates are the main national holidays – Christmas, Easter, Bank holidays, Eid, Ramadan, Hanukkah. But beyond that every day celebrates something that relates to different likes and communities around the world – whether it is food related such as vegetarianism or veganism, National Avocado Day, Black Monday, Blue Monday, Pi Day, National School Counselling Week, National Clean Your Desk Day, even a National Random Acts of Kindness Day.
You can pick as many as you like to use as vehicles to market your business, structuring your weekly and monthly activities and giving them focus.
Creating a structure is crucial for business success. It focuses the attention on the future and helps you to be more creative around your marketing, and keeps you grounded and organised when it comes to resourcing and reinvesting.