23 articles
When a lender asks about interest cover and gearing, do you know what they mean or how your numbers measure up? This guide breaks down both ratios with a worked example, shows how to calculate them yourself before applying for finance, and explains what to do if your figures are not strong enough yet.
A dollar invoice that shrinks on paper without any discount or dispute can baffle SME owners at year end. This article unpacks how IAS 21 and FRS 102 Section 30 require foreign currency transactions to be recorded at the spot rate and then retranslated, walking through a worked $50,000 example, the monetary versus non-monetary distinction, and the tax implications of exchange gains and losses.
Profitable on paper but short on cash? This guide explains free cash flow versus accounting profit, then walks through a full worked example with a fictional joinery business to show exactly where the money disappears to.
SMEs often build cash flow forecasts on wishful thinking, assuming invoices pay exactly on their due date. This article shows how AI tools analyze twenty-four months of real invoice history to build a rolling thirteen-week forecast that reflects actual customer payment behavior, catching cash gaps weeks before they happen.
A profitable month on paper and an empty-feeling bank account are not a contradiction — they are two different accounting lenses on the same business. This article unpacks the gap between accrual and cash basis accounting with a worked example, journal entries, and a step-by-step reconciliation so you can stop confusing timing differences with real trouble.
A supplier says the new machine pays for itself in three years, but is that reason enough to spend £120,000? Learn how payback period, NPV and IRR work together to test whether a capital purchase genuinely creates value, with a full worked example and the accounting entries behind it.
Bank feed categorisation powered by machine learning promises to end the drudgery of manual transaction coding, but how does it actually decide where a payment belongs? This article breaks down the pattern-recognition logic behind AI bookkeeping, walks through a worked example for a small consultancy, and shows why confidence scores — not blind automation — are the key to trustworthy management accounts.
EBIT, EBITDA and net profit are not competing answers to the same question — they are three different lenses on the same set of numbers. This article unpacks what each metric strips out, why lenders and buyers favour different ones, and how a single SME's figures can swing from a £150,000 headline to a £60,345 bottom line depending on which line you stop at.
Revenue alone can mislead you about which products deserve your attention. This guide explains contribution margin and margin of safety through a worked CVP example, showing SME owners how to spot which products truly convert sales into profit and how much of a cushion their business has before hitting breakeven.
Hiring contractors through their own limited company can save money, but only if the engagement is genuinely outside IR35. This guide breaks down the control, substitution and mutuality tests, shows the real cost difference between inside and outside status with a worked example, and explains how to document your decision so HMRC cannot catch your business out retrospectively.
