One of the most daunting tasks as a new business owner is keeping track of your financial records, it can be a scary thought! All to suddenly you can be thrown into a world where instead of just receiving your pay packet – you need to be the one to control the finances.
Since it can be a tough transition – we thought we would give you some handy tips as to how you can manage your own books. There are some central London accountants out there that are reasonably priced who could also help.
Take Financial Records from the Beginning
As soon as your business is set up you need to start keeping record of any financial transactions on behalf of your company. You may actually accrue costs before you start up, these can be deducted from profits and reduce your tax liability.
Know your Dates
There will be lots more dates in your financial calendar than you used to be. You may want to make note of important dates to make sure that they don’t go unmissed such as VAT, tax and PAYE. This is so you don’t get any nasty surprises when these dates arise.
Get a System in Place
You will want to get yourself some accounting software as soon as possible. There are some free options such as Wave Accounting where you can pay for additional services as you go – or there are some really good cost-effective professional services such as: Quickbooks, Xero or Sage One. If you do plan on getting an accountant, then run the system by them. It may be that they are already familiar with the software that they use – and recommend you utilize the same.
Go on an HMRC Workshop
HMRC offer free workshops where you can get to grips with some important info for free such as running payroll, introductions to VAT, setting up a limited company, construction industry scheme as well as other important aspects. There is also a free payroll solution that they offer.
Make Sure you Budget for Tax
Remember although you may make a profit – not all of that money is yours, there is tax to be paid. The last thing you want is a shock bill at the end of the year, so make sure you have a savings account where you are putting away at least 20%-25% of it.
Claim your Business Expenses
If there is any cost that is wholly or exclusively for your business – then this can be claimed for. Make sure you keep all receipts whether it be for train tickets, stamps, stationery etc – and record it. If you user a home office, you can claim for a percentage of your domestic bills, and even a proportion of your mortgage interest.
If you are starting out on your own, don’t be too worried – a little organization and planning, as well as some sound advice will go a long way.