It’s a time of change. You will probably have had to change your routine. Maybe you’re having to think of ways to amuse yourself. I have taken up skipping and I was heartened to hear a passer-by in the park this week say, “You’ve inspired me to skip!” I have also taken part in an online creativity workshop which I didn’t think I would be able to attend as usually it is held midweek in London.
What are you doing differently?
Hi, I’m Anna Goodwin – Author of five books, Director, Mentor, and Trainer for Anna Goodwin Accountancy.
Basically, I take the stress out of finances – both business and personal. From running my own business and helping others to run theirs, I know it’s important to keep up to date and learn new skills. Of course, now there may be more time to do it – unless home schooling is taking up most of your day!
I have heard of people:
- Learning to sing
- Learning an instrument: my nephew is continuing his piano lessons on Zoom! Incredible what’s possible nowadays isn’t it!
- Learning a language. My friend has always wanted to learn French and now is her opportunity to do it!
I understand that not everyone is in the headspace (or has the additional time) to devote themselves to a new skill. Some of you may be at your wits’ end trying to keep your business afloat or worrying how you are going to pay your bills. However, what if that new skill could help you and your business?
So if you’re open to learning a new skill which could do just that, ask yourself:
- Do I understand my accounts?
- Can I read them and use them to plan for the future?
If the answer is yes – great! But if no or you’re unsure then you could take time to try and understand them now.
It’s even more important at the moment as you could be struggling to understand whether you are eligible for the Self-employed Income Support Scheme. If you are finding it difficult to understand, this HMRC update is useful.
Whether you’re a sole trader or a director of a limited company you need to be able to understand what your profit is made up of.
This will give you:
- confidence in running your business
- knowledge of how changing your prices – either increasing or decreasing them – will impact on your business
- an ability to plan for the future
In its most simple form, the profit and loss account (P&L) tells you how much you’ve sold, how much you have bought and how much profit (or loss) you have made over a specific period of time – often a year, month, or quarter. The P&L shows your business’s income, less its day-to-day running costs.
So make a start:
- Find your last set of accounts
- Look through the figures – use my simple guide to reading your profit and loss account
- Do you understand what the figures mean in relation to your business?
- Have a look at this year compared with last year – are the increases and decreases between the figures what you would expect?
How great would it be for you to use this time to crack it so that when your business is back up and running you can use your figures to improve your business. You will be able to ask your accountant questions with more confidence and you will be able to understand the answer!
Reading Your Profit And Loss Account – My 6-Step Action Plan
Click the ‘Download’ button, below, to get your free copy of my 6-Step Action Plan to help you read your profit and loss account.