Jump to Main ContentJump to Primary Navigation
Top

Get your books in order

GETTYAccounts.jpg

The only two sure things in life are death and taxes…

Whether you’re a large corporation, small business or self-employed start up, the tax man will come knocking, which is why it’s essential to keep your finances up to date. Without an accountant on hand to help, this can appear a daunting do-it-yourself task, and so we've enlisted the help of tax and financial expert Sonny Benning from Hamilton Reiss, who says, “as a budding entrepreneur record keeping is a crucial priority for a successful business – it’s the glue that keeps your company together.”

Here he shares his top tips for keeping your accounts in order:

Befriend the tax man

Not literally, but keeping HM Revenue and Customs happy (that’s soft talk for ‘asking questions about your business’) is a priority. Your first step is to register yourself at hmrc.gov.uk to avoid any penalties and fines. You’ll find the right forms to download for your new business and obtain a Unique Tax Reference number which will help you or your accountant complete your yearly tax returns.

Itemise, Itemise, Itemise

Keep all your receipts for business outgoings and also income and log them in an Excel spreadsheet. Not doing this could mean missing out on vital money-saving income tax deductions and credits. Also, many accountants will charge extra for basic record keeping you can do yourself. Log receipts numerically and write what type of expense it comes under – i.e. office rent, marketing, business supplies. Do this for each month and file them. This will save heaps of time and avoid last minute scrambling around at tax time.

Set Up A Business Bank Account

Save yourself from sifting through groceries and fashion buys on personal bank statements by opening up a separate business account. By not mixing the two up, you’ll easily stay on track of payments and outgoings. Also it keeps your private life, private as you’re required to hang on to bank statements and financial papers for six years - the typical window during which your tax returns may be audited and checked for any errors.

Get an Accountant

Good professional accountants will offer free advice early on and save you money in the long term. Hiring a professional to do your end of year filing means you don’t have to worry about arbitrary government rules or missing out on tax allowances and can concentrate on doing what you do best: running a successful business.

Simplicity is Key

There’s no need to make record keeping scary – in your first year of trading, all you should be doing is keeping a basic ‘money in’ and ‘money out’ expenses spreadsheet. You don’t need to buy any expensive accounting software.

Set Money Aside for Tax

Set some of your yearly earnings aside for tax (you need to check what tax bracket you're in for the percentage) with a monthly standing order that automatically deducts from your bank account into a separate savings account. Or, put aside a bit of every pay cheque into your savings account. It's a good business habit. Many business bank account providers offer linked instant access savings account for this reason.

Avoid Leaving Things to The Last Minute

Don’t think of your accounts as something you do at the end of the year: stay on top of receipts and invoices on a weekly or monthly cycle. Keeping tabs this way lets you know how and what areas of your business are working and what aren’t. Also, not worrying about the unexpected means you won’t find any surprises or mistakes on your tax bill, so you’ll have plenty of time to iron issues and find extra cash for outstanding tax.

Chase Payments

Be organised by creating a diary or email reminder system for tracking invoices and reminding you what monies are outstanding. Don’t be shy – you’ve done the work and should be paid for it.

Picture credit: Getty images

Related

GETTY92570151.jpg

The Lost Art of Conversation

82174323.jpg

How to write a business plan

alansugar_hero.jpg

How to take criticism at work

Comments

More

Reclaim Your Lunch Break top supporters

25 Jun 2015

Is the best thing about dropping everything coming back home?

by Amy Swales
10 Sep 2014

Launching an online business; 10 golden rules

"It started with just the desire that it should exist"

30 Jul 2014

Increase productivity and manage your time better with this handy infographic

From managing emails to what to wear

08 Apr 2014

Meet the mothers and daughters who run successful businesses together

by Sejal Kapadia Pocha
26 Mar 2014

Why women don’t need secret business rules from men

25 Mar 2014

Our favourite powerful women share their wisdom on careers

25 Feb 2014

Meet the panda puppies

Your cute fix sorted

25 Feb 2014

Work Life: Aerin Lauder, Image and Style Director of Estée Lauder

A one-day diary from morning latte to lights out.

18 Feb 2014

Work Life: Betty Adewole, Model

A one-day diary from morning latte to lights out.

11 Feb 2014