01 Feb 5 key accountancy tips for small business owners
When running a small business it is important to get the finances right. Many small business fall short because of mistakes and commonly these relate to accountancy, VAT and import or export duties. Following these 5 key accountancy tips will help you to keep your finances on track and give you the best chance of success.
Separate your finances
Separating your finances is vitally important. As an employee your employer will pay your taxes and manage the overheads, leaving you free to spend the cash in your bank account. As a business owner, however, you must keep these funds separate so that you don’t accidentally dip into funds that you shouldn’t be accessing. There is also a legal requirement for Limited companies to have separate business accounts to prevent this from happening.
Maintain accurate accounts
Maintaining accurate accounts is essential in ensuring that you are on top of your finances as failing to account for all spending, VAT, duties and income could have serious consequences. These consequences could include fines and even criminal charges in some cases, but most commonly small business owners are hit by larger than expected tax bills that can cripple a struggling business.
Recruit an accountant
Recruiting an accountant or using an outsourced accountant is important for small businesses. While many are reluctant to do so, the experience and expertise offered by a qualified accountancy professional can actually save you money. By managing your books properly they can ensure that you pay only the minimum required amount of VAT and tax and can keep your business finances in the black.
Be aware of tax deadlines
Tax deadlines can be daunting, but missing deadlines is a sure way to put your business under more stress. You will receive late fees and fines for missing these deadlines and can incur daily charges too. Make sure you prepare for these deadlines with your accountancy professional and ensure that you submit your tax return on time.
Embrace software for accounting
Technology can make your accountancy far easier to manage so it is important to embrace the systems available to you. Remember that your competitors all have access to the same systems and don’t put yourself at a disadvantage by using by-gone systems to keep track of your books.