Our first big invoice has been paid, ON TIME and EVERYTHING.
This is a momentous day, it’s the day it feels like we can make it. This is the first time we can pay ourselves.
We have a meeting with our accountant this morning to confirm next steps.
From my understanding:
- Revenue – expenses (including: payment of freelancers, telephony, banking, accountancy, servers, hosting etc.) = Operating Profit
- Operating profit – 20% for Corporation Tax = Retained Profit
- Retained Profit x 60% = the recommended max. amount for dividends
- Remaining Retained Profit (40% > should be saved)
Of course, the max. 60% may not be suitable, this depends on our pipeline for the next few months (which exists, but is not as full as I’d like). As much as paying ourselves is important, and necessary, we have obligations, to our clients, to our service providers, but above and beyond all, we have one singular responsibility:
We look after our ‘people’ – our ‘people’ is in fact one freelancer, a long time colleague and great friend, it is the rule, his payment comes first, always and without fail