As a small business owner, you’ll find your role can be a varied one. While it’s understandable that you’ll want to keep close tabs on your firm’s financial accounts, you may find, in time, it’s a task better suited to a professional service. While you’re still building your business, here are some key accounting tips to point you in the right direction.
Separate business and personal finances
Setting up a business bank account that operates separately from your personal finances is key to having a clear picture of your company accounts. This can save you time tracking transactions, and it makes it much easier to declare tax and claim for business expenses.
Keep all records tidy
Always ensure your accounting records are in good order. Being organised means information is always easily accessible and performing accountancy tasks is far quicker, whether you’re completing a tax return or chasing an unpaid invoice.
Generate profit and loss (P&L) statements
Create a P&L statement for an overview of your company’s financial health. It can effectively sum up your firm’s revenues, costs and expenses over a specific period of time, satisfying the requirements of HMRC.
Retain your receipts
Ensure you keep all your company-related purchase receipts neatly filed away so you can claim for them. Professional accountants can often save their clients from paying excess tax by mitigating amounts due with expenses. Many people are unaware of the business expenses that can be claimed for, such as uniforms you need to wash or energy bills when you work at home.
Meet tax deadlines
Make a note of your tax deadline and set yourself a reminder that gives you plenty of time to complete your return. Use your orderly records to complete the task and file your return on time to avoid unnecessary fines.
Understand your tax requirements
It’s vital that you understand which type of tax applies to both you and your company so that you can be prepared to make payments. Research National Insurance contributions, corporation tax, income tax, business rates and VAT, and then assess which you need to pay.
HMRC offers free workshops and guides on a wealth of business-related topics, so educate yourself on any areas of your accounting you’re unsure of, whether it’s creating a limited company or VAT. Alternatively, a qualified accountancy service can explain your tax requirements in simple language and outline the best ways to make payments, ensuring you never pay more than necessary.
Budget for tax
It’s always advised that as your business earns, keep money aside for the tax you must pay. Being unprepared and facing a massive tax bill unexpectedly when you complete your return is no way to start a new financial year. A professional accountancy service can help you calculate your estimated tax minus expenses so you can face your annual return with confidence.
If you’re currently seeking an accountant for your small business in South Yorkshire, we can help. With an expert understanding of small business accounting needs, you can count on our team for a service tailored to your firm. Contact Adaptive Accountancy today to get started.