Now that the credit crunch is really digging its heels in, there’s no doubt that things are going to get worse before they get better for the majority of British businesspeople. Recent forecasts warn of a winter recession, while a survey of British workers revealed that many are now experiencing sleepless nights over financial concerns.

Whilst lack of sleep may not be an effective way of safeguarding your livelihood, it is also a very bad idea for business people to ignore the problems they are facing. For those who are struggling in the current economic climate, the most important thing is to monitor the progress of their business with effective bookkeeping and to react swiftly to any warning signs.

Here are five reasons why small businesses need to put even more emphasis on bookkeeping during the recession:

1. Monitor and Control Expenses

Now more than ever, it is important to watch the level of expenditure and not to let it get out of control. Regular accounting will tell you how your expenses are running when compared to your targets, and will also allow you to compare monthly income against monthly expenditure.

2. Save Time and Money

Talking of levels of expenditure, the cost of an accountant to prepare your Annual Accounts and Tax Returns is based upon the time it takes to do the work. It follows, therefore, that if you can reduce the accountant’s time by doing much of the work yourself, you will reduce the fee. If you do all the basic bookkeeping and present to an accountant simply an annual summary asking just for your Self Assessment Tax Return to be completed, you will have saved the accountant a lot of time, and yourself a lot of money. A time-saving self assessment software can be a wise investment.

3. Claiming Expenses against Tax

UK tax regulations provide for expense claims to be allowed for monies spent in the normal course of business. Many people who work from home are self-employed. These two areas give rise to a wide range of legitimate expense claims where expenditure previously classed as ‘private’ now become ‘business’ and, as such, will greatly alter the level of profit and tax payable. However, without a proper set of accounts and records, such expenses cannot readily be quantified, and certainly cannot be substantiated if req­uired at a later date.

4. Getting an Initial Tax Refund

Many self-employed people start work on a part-time basis while still maintaining a full-time job elsewhere. Almost inevitably this ‘day job’ will be taxed under the rules of PAYE. Often the first year or so of self-employment will result in an excess of expenditure over income termed a ‘tax loss’. At the end of every tax year, all income is pooled from whatever source and the total tax bill recalculated. By bringing in a tax loss and setting this off against tax already paid, a tax repayment not only pays the accountant’s bill, but also is a way of recovering part of the initial investment into the business. Remember, however, without any accounts you cannot calculate the ‘tax loss’, and you will miss out on the self employed tax repayment.

5. Borrowing Requirements

From time to time, and potentially during an economic downturn, the need to borrow will arise. It may be a new mortgage or money for the business but, in all cases, the lender will want to know the levels of income and profit to support the loan. No accounts = no evidence = no loan!

Daniel Egerton writes content on behalf of SamsTax, a company providing online self assessment software to help self employed and small business people keep track of their income and expenditure with ease throughout the year.

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One of the most important things you can do to reduce utilities is to use a programmable thermostat. These are not very expensive and, let’s face it, who remembers to turn up and turn down the thermostat when you are retiring at the end of the day, or coming back into the house after being away. You can certainly pay for the cost of the thermostat in a short space of time and its a wise investment.

We have so many appliances in our modern home that we are definitely spoiled. If you look back a couple of generations ago, all of the tasks we took for granted were performed by hand. If you really want to make a difference and reduce utilities, consider taking a leaf out of their book. Wash dishes by hand, for example and if you live in an appropriate area, try hanging the clothes out to dry. They will smell a lot fresher and last a lot longer.

Even though you might think that lightbulbs do not use a lot of electricity by themselves, if you do not pay attention to those lights that remain on all night when you are sleeping, for example, you will find that your attempt to reduce utilities will not be complete. Why not go and get some of those really affordable timers and set a “switch on” and “switch off” time accordingly.

Your refrigerator uses quite a lot of electricity and relies on a system of fans to keep it working efficiently. These tend to be on the floor or at the rear of the appliance and you should make sure that you regularly clean these areas to make sure the dust, debris, cat hair and so on does not block these areas. If so, the machine will run far longer than it should.

Look after the internal temperature of your home by seeking out any air leaks at windows and doors. You don’t have to worry about big insulation jobs or replacing window panels, all you need to do is to find some draft stoppers or door snakes. These are very versatile and can be maneuvered to fit in any space. As they are great insulators, they will really help you to cut down your bills and reduce utilities.

Remember to unplug all your appliances when they’re not in use. When anything is plugged into a wall socket it will trickle electricity and it all adds up. Your goal is step-by-step to reduce utilities and every little will help.

If you want to reduce utilities by up to 20 to 30%, pay particular attention to your thermostat settings. Let dishes air dry instead of being heated and always wash your laundry in cold water and you will be amazed at the overall effect you will have on your budget.

Discover detailed information about ways to reduce utilities. Make sure you sign up for our free newsletter at http://www.cleanupstuff.com and get our free report. A toll free resource is available on our site to answer any questions.