As a small business owner, we know that life is always a little bit hectic as you try to juggle the never-ending to-do list. And let’s be honest, managing your accounts isn’t likely to be top of your list. So what can you do to make accounting less of a tedious task?
We’ve pulled together some top tips to help make accounting easier, quicker and more convenient – freeing you up to focus on what you do best. Let’s take a look at some of the things you can (and should!) be implementing in your accounting procedures:
Keep your business and personal finances separate
Using the same account for business and personal use can cause quite the headache. With lots of different transactions coming and going, it can be difficult to keep track of which expenses relate to your business. Therefore, to make things much simpler and clearer, we recommend opening up a separate business bank account.
If you use credit cards, consider getting a separate business credit card too. This will help you establish a credit score for your business, without affecting your personal credit score.
Even if you’re not yet required to comply with the government’s Making Tax Digital (MTD) scheme, it’s likely that you will need to comply with it in the near future. So why not avoid the inevitable and switch to digital accounting software now? There are so many benefits in doing so! It makes managing your accounts so much quicker, more efficient and cost-effective – you can automate many procedures, it gives you a clearer view of your business’s finances and it reduces the risk of errors. Talk to the Warr & Co team to learn more about MTD and our recommended bookkeeping solutions.
Keep detailed business records
It may sound obvious but ensuring you have an organised method of storing and maintaining accurate business records will make your life much easier when it comes to filing and paying your tax. How long you need to keep your business records for depends on the type of business you’ve set up, but it’s usually around 6 years. You can learn more via the HMRC website.
This leads us on nicely to our next top tip…
Manage your accounts little and often
It’s so much easier to keep on top of your accounts if you regularly chip away at it rather than putting it all to one side and being outfaced by a huge stack of paperwork at the end of the tax year! So be strict with yourself and set aside time at least once a month to work through your list of accounting tasks. Not only will you be glad you did when it comes to filing your tax, but it also means that you’ll have a better overview of your business finances throughout the year.
You’ll no doubt be familiar with budgeting for your small business, but do you usually budget for your tax? Setting aside money for your tax bill throughout the year is a good way to prepare for and prevent financial shock when the bill comes in!
Make a note of deadlines – and stick to them
Make a note in your diary of any upcoming accounting deadlines that apply to you. That way you won’t be caught out and you’ll be in a better position to be able to budget accordingly for any upcoming tax bills. We also recommend that you begin filing your returns as early as possible to avoid the stress and potential for mistakes and late filing penalties that are likely with a last-minute rush.
Take advantage of free HMRC tools
HMRC has a huge variety of free tools you can use to your advantage to help you manage your accounts and budget for your tax bill more efficiently. There are various online tools and calculators, webinars and workshops that you can get involved in. So find out what’s available in your area!
Hire an experienced accountant
We’ve saved the best ‘til last… hiring an experienced accountant is probably one of the best tools you can use to make accounting stress free. They’ll take care of all of the nitty-gritty for you, they can explain which taxes are applicable to your small business, and they can identify key areas where you could be saving your business money. So let them do the hard work for you!
Here at Warr & Co, we’re proud to specialise in small business accounting. We take a different approach; we celebrate that every small business is unique and so we believe that the services available to you should be too! That’s why we offer a tailored approach so that you can ‘mix and match’ the services that are most applicable to your business. You can find out more about us and our small business accounting services via our website, or you can request a free, no-obligation consultation with one of our experienced accountants now.