This is general information, not tax or legal advice. Rules and rates change, so check GOV.UK or ask an accountant.
Your profit and loss shows a single number. To decide where to spend time, you need to know which projects, clients, sites or products make money. That means tagging each transaction.
What to track
- Projects or jobs, for agencies, builders and consultants.
- Clients, to find the profitable and the troublesome.
- Locations or branches, for shops, gyms and clinics.
- Product lines or services.
A simple setup
- Choose one way to slice the business first.
- Create a tag for each item, such as each client or job.
- Tag every invoice and bill. Do it when you enter it, not at the end.
- Run profit and loss by tag each month.
Shared costs
Rent and software serve everything. Decide whether to leave them untagged, or share them by a fair rule such as headcount or revenue, and keep to it.
Common mistakes
- Too many tags, which nobody keeps up.
- Inconsistent names.
- Tagging income but not costs, so margins look too good.
Use the results
Raise prices where margin is thin, drop unprofitable work and focus on the best clients. See how to price your services.
How AvrioBooks helps
Segments, on the Standard plan and above, tag transactions and filter reports. See segments, accounting for agencies and multiple businesses.
Frequently asked questions
What is a segment?
A tag on transactions, such as a project, client or site, so you can filter reports and see profit for each.
Should I tag costs as well as income?
Yes. Tagging only income overstates margin.
How many segments should I use?
Start with one way of slicing the business and keep the number manageable.
Which AvrioBooks plan includes segments?
The Standard plan and above.
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