Hi Everyone, so as a Chartered Tax Accountant I know a few tricks when it comes to running your business accounts and so I thought today I would spread some of my top tips when it comes to running your day-to-day accounts.
1. Keep all invoices and receipts
This may sound pretty simple but many people forget to keep a copy of all their business expenditure. The reason this is so important is simply because the HMRC have the power at any time to audit your business/company and will need to see proof of all your business accounts, if you don’t have a receipt to prove that you paid for something that you have claimed for in tax then you could be in some serious trouble. So please remember to have a system which allows you to store a copy of all of receipts/invoices for 5 years if you’re a sole-trader or partnership, or 6 years if you’re a Limited Company.
My best advice would be to have something alike the Zlogg system which allows you to take a photo/upload all of your receipts/invoices into your Zlogg account where they are stored for 6 years and allow you to download everything if the HMRC come a-knocking! If you’re not a tech-savvy person then my other advice would be to have a large year diary which has a page per day which allows you to simply attach any receipts/invoices to the exact date page for easy future reference.
2. Keep all bank statements
This is much alike the invoices/receipts tip but I wanted to ensure it was listed separately since instead of keeping these for the purpose of proving your expenditure, your bank statements will prove your business income instead.
So it’s the same deal, HMRC can request to see all proof of documents at any time so ensure you have a good system which allows you to quickly and easily access your statements for up to 5 or 6 years.
3. Have a good bookkeeping system
Forget the term ‘bookkeeping’ for a second since I know this word scares a lot of people. All I’m saying here is that you need to log, manage and update your business accounts on a regular basis – at least once a week.
I know many people forget to keep on top of their accounts all year and then when the tax-return season pops up, they quickly download all their bank statements, make up an Excel document and rush through everything over the course of a few days. This is bad for 2 reasons: firstly, it’s very easy to miss specific things when you rush through your business accounts and secondly if you leave it too late I have seen people miss the deadlines since they “didn’t realise it would take that long” and are then fined.
Also think of it this way, if you are rushing and happen to miss a big tax deductible expense…you’ve lost money right there!
4. Have a separate business bank account
Before I go any further I must state that this isn’t a necessary thing, you are not required by the HMRC to have a business bank account for you business. However the reason I’ve made this a top tip is becuase it just makes everything so much easier when going through your business accounts. Having a single business account which you only use for all business income and expenditure, then keeping on top of your business accounts is going to be a breeze. When you use your personal bank account for everything then the problem is that you have to filter through what is/isn’t business income and expenditure, so just having one account which you know is solely for business business use just makes that added ease for your accounts and tax return.
Also on a final note here, it make you look a lot more professional having people pay into an account with the business name on and not your personal name, you can easily set up a business bank account with any of the leading banks by simply going in and talking to an advisor.
5. Know and remember your tax dates
This is a biggie – especially if you have a Limited Company. There are so many deadlines and dates that come with running your own business that it can become very messy trying to remember them all and actually just knowing which date is which.
So every year make sure you have all the tax dates listed somewhere that you can easily see on a daily basis and be reminded of. It’s not too bad when you’re simply a sole-trader since you only have one real deadline which is the self-assessment tax return, but as soon as you go Limited you’ll have a lot more deadlines and dates across the year so it’s very worthwhile knowing them all.
And that my friends is my list of 5 top tips to remember when running your business accounts!
I hope that helps and if you want anymore information just contact me at firstname.lastname@example.org
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