It is never is being a business owner. A business owner already has to do so many tasks and activities. Accounting is an important area of a business.
In a business, accounting deals with the process and work of all the financial accounts. This means all the ins and outs of a business when it comes to money gets recorded.
If you do not have the financial means to hire someone to do all the financial-related work and tasks, then you can follow the steps below to set up your business account and keep it all on record.
Essential Account Tips
Follow the nine steps below to keep your books organized.
Keep Personal & Business Finances Separately
Never do the mistake of keeping your personal and other income or business funds together.
As a business owner, you have to understand business is business and personal is personal, and combining them is never a great idea.
You do not want to waste your time looking through every transaction you have done to get the business-related transaction your looking for.
So, to keep yourself hassle-free, the most logical and practical thing is to have separate bank accounts.
This way, it will be easy for you to do taxes and be more organized regarding your personal or business finances.
Keep Records Accurate and Organized
Clutter is never a good idea in a business.
A business can not work properly if its documents are not accurate or well-organized.
When it comes to your business finances, you should keep them organized according to months and ensure you keep all records and transactions accordingly.
When you have everything organized, you can find what you need without a problem and not worry when the tax deadlines creep their way out.
Keep the records neat, tidy, and much more organized.
Never Miss the Tax Deadlines
Tax deadlines creep out when your least expecting it.
Tax deadlines do not get remembered, which can create a lot of problems.
The first and the most important task set yourself a reminder. It can be on your calendar or phone, letting you know your tax deadline is approaching, much like a deadline.
As the tax deadline approaches, one can become stressed and at times rush things, making a lot of mistakes and further making the process long.
Set a countdown for your tax deadline: so you never forget.
Once you set a reminder, you will remember on time, fill in your tax return on time and without any mistakes.
The accurate your records will be, and the less stress you will have.
Keep All Receipts
All business-related receipts should get recorded.
Why?
When you keep all business-related receipts for all purchases, then you can also claim for any business expense.
You can claim back from your business depends on the type of business you are running. For example, if you work from home, you can claim domestic bills.
Moreover, you can get claims for various things no matter how big or small something is, like a stamp to stationary to bills.
Therefore, it is useful to keep all receipts for tax purposes and to get claim backs.
Attend Free HMRC Workshop
Believe it or not, the HMRC does offer something free.
They often hold workshops.
Search if they are holding any workshop near you and attend it to learn about their e-learning tutorials and get the knowledge you need.
They offer e-learning for various topics. It can be VAT information, creating a limited company, online filing, and so on.
HMRC is always trying to have something going on for its people, to help them understand various things.
Budget for Tax
Yes, you are probably making lots of money and profit. However, the sad truth is not all money is yours.
You have to give some money to the tax people.
The best way to not get stuck because of tax is when your budget for the tax and save as you go along so you have money to pay the tax by the end of the year.
Open a separate account where you can keep some of your money to the side to pay your tax without any worry.
This will allow you to keep the rest of your profit and enjoy as much as you want.
Understand all Tax Rules
Taxes are really important and ensuring you know which ones you have to apply for and pay.
It can be income tax, National Insurance, Corporation Tax, VAT, and many other.
Therefore understand all tax rules, so all the research you need to understand them all and pay what gets needed.
Create Profit and Loss Statements
You should create a profit and loss statement.
Why?
It will help you keep a snapshot or record of the overall health of your business.
All the expenses, costs, and revenues will get summarised in these statements and help you satisfy HMRC.
It will consist of your gross profit, net profit, operating profit, and the overall profit before tax.
The statements will get made over 12 months or so.
Overall, it will let you know how much your business has made.
Use a Digital App
The digital world is everything.
These days there is an app for everything.
So, it is not surprising that there is an app for all your bookkeeping and accounting apps.
You can download this app and record all your incomes, outgoings, and taxes on it and organized it in one place.
This will make the whole process easy.
Final Thoughts
The finances area of a business is as important as the rest. You can get in trouble for not paying taxes properly. Therefore, organize everything your finances related to your business and keep it all separate from your personal accounts.
So, how are you doing in keeping your finances?