Have you recently started your own business or already own a small business? We hope you have been researching how to manage business finances! Bookkeeping and accounting are extremely important in a business, and for small businesses, it can be quite challenging. So luckily for you, we have gathered 5 tips and tricks to help you and your business with its bookkeeping and accounting.
Open a strictly business bank account
Firstly, if you’ve not already done so, it would be a good idea to open a business bank account to help you separate your personal finances from your business finances. Ensure that the business account can be accessed easily via an app so that you are able to view your account even on the go. Every business transaction is thus recorded on your business bank account, making it easier to bookkeep.
Track and record payments and expenses
Keep on top of your business expenses and transactions. If you plan on claiming back any tax, you must retain physical receipts, even if it is a hassle, and do not delete those e-receipt emails. Ensure that you are able to see the dates of your transactions just in case you need to refer to these later on as well. It may be worthwhile taking the time to organise a filing storage space within your office for any physical documents to be securely stored.
Know the legal requirements
Knowing what financial documents you legally need to submit and when the deadlines they need to be submitted by is extremely important when it comes to running a business. If your business qualifies as a micro-entity or small company, there are a few differences when it comes to what you need to send to HMRC and Companies House, so do your research.
Remember that you must submit end of year accounts, along with corporation tax return, to HMRC within 12 months of the end of your business’ financial year, as well as send abridged statutory accounts to Companies House within 9 months of the end of the financial year. The law also requires you to possess detailed accounting records.
Employ accounting software
If you’re having difficulty with managing bookkeeping and accounting on top of handling your business as a whole, it may be best to outsource help through softwares such as Xelix which can assist you in automating and streamlining your accounting processes. There are many platforms available and they offer a range of features like automating audits and reducing errors in financial data, as well as improving efficiencies in accounts payable processes.
Plan and develop a budget
It would be wise to develop a quarterly or even monthly budget to ensure that your business has enough funds to effectively operate. This budget can be developed through insights and reports of the financial state of your business, so that your decisions in the future regarding monetary aspects of the business are well-informed. Setting money aside for tax and bills would also be a good choice so that you’re not left with any unpaid tax (which incur penalties from HMRC) and unpaid bills which can hurt the operations of your business.
And there you have it – 5 bookkeeping and accounting tips for new and small businesses.
