Accounting for small businesses is often a pain point for many new entrepreneurs. However, proper accounting is absolutely essential for business success. Businesses come and go! Whether you’re a start-up, freelancer, sole trader or run a limited company, having a handle on your finances from day one is crucial.
In this guide we present some easy action points to give you the perfect start.
Don’t have time? Here’s the wrap-up of this article in less time it takes to eat a taco 🌮
▪ Track every expense, no shortcuts!
▪ Open a dedicated business bank account to keep personal and business finances separate.
▪ Learn bookkeeping skills to help manage your finances.
▪ Prepare and File your Self Assessment on time to avoid penalties.
▪ Set up payroll if you have employees. If you’re a single company director, you count as an employee also. Pay yourself correctly – salary or dividends.
▪ Stay informed of tax rules and deadlines to avoid penalties.
▪ Set a budget to track expenses and plan for growth.
▪ OMB Connect community members get access to exclusive support at Arthur’s. n.b. Stay Sharp, Stay Savvy and Keep Winning.
Skip right to…
- Spill The Beans! Making Accounting Easier for Everyone
- 1- Record Your Expenses
- 2- Open a Dedicated Business Bank Account
- 3- Some Basic Bookkeeping For Financial Management
- 4- Get Ready for Self-Assessment
- 5- Get Payroll Up and Running
- 6- Show You The Money 🤑 (paying yourself)
- 7- Get Your Diary and Note the Tax Dates
- 8- Get Your Budget In Order
- Conclusion – Are You Part of the OMB Connect Community?
Spill The Beans! Making Accounting Easier for Everyone
1- Record Your Expenses
This might sound basic, but tracking every penny spent on your business is fundamental. Every receipt, invoice, and bank statement is vital data that could unlock potential tax rebates or simply give you an accurate picture of your business’s health.
Tools like accounting software that include receipt scanning functionality (check out our top recommendations) can simplify this process. The key is to record the expense amount, date, and a short description of what it was for.
2- Open a Dedicated Business Bank Account
Whether you’re trading in your own name or as a limited company: Keep the personal ‘Personal’, and the business ‘Business’.
One of the first steps in simplifying accounting is opening a business bank account. This makes it easier to track all business-related expenses and income, provides clarity when it comes to tax filing, and helps maintain privacy for your personal finances.
Some benefits of using a business credit card include earning rewards points or building a separate business credit history. We partner with FSCA-protected business banks like Zempler, Tide, and Revolut—find out more about them here.
3- Some Basic Bookkeeping For Financial Management
Sun Tzu famously said: Knowledge is power. (And if he didn’t, he should have!)
You don’t need a degree in accounting to manage your small business finances, but you should know the basics. OMB Connect is here to break the myth and give you the tools and information you need!
Understanding terms like income statements, balance sheets, and cash flow can make a huge difference. These things are a must know, for every business owner.
Investing in affordable bookkeeping solutions for your businesses and using accounting software like Xero, QBOL, FreeAgent, or Sage can save you time and money, and give you more control over your business’s finances.
4- Get Ready for Self-Assessment
For sole traders, limited company directors, or members of a registered partnership filing a Self Assessment tax return is an annual must.
With accurate records and organised financial data, this process can become a lot simpler.
5- Get Payroll Up and Running
Hiring staff means taking care of payroll. It’s essential to ensure employees are paid accurately and on time, as well as to calculate deductions like National Insurance and tax.
Payroll software can help you manage this efficiently. Learn more about setting up payroll and pensions here.
6- Show You The Money 🤑 (paying yourself)
As a business owner, deciding how to pay yourself is a key decision. If you’re a sole trader, you’ll likely withdraw profits directly. However, if you run a limited company, you may choose to take a salary or pay yourself through dividends. Both have different tax implications, so it’s important to choose what works best for your situation.
Learn more about how to pay yourself as a business owner here, and for a deeper dive download our dedicated eBooks.
7- Get Your Diary and Note the Tax Dates
Not knowing tax rules and deadlines can be costly. Ignorance isn’t bliss! Missing deadlines can lead to hefty penalties. Keep yourself updated with important tax dates like self-assessment deadlines, PAYE schedules, VAT return timelines and corporation tax payments.
HMRC’s website has tax calculators and guides made for small businesses. Find out more about key business and tax dates here.
8- Get Your Budget In Order
Budgeting is one of the most effective ways to keep control of your business finances. A budget allows you to forecast income and expenses, plan for taxes and spot areas where you can cut costs, and see how well you’re progressing toward your financial goals.
Remember, a budget should be a living document that’s updated regularly to reflect changes in your business operations.
Conclusion – Are You Part of the OMB Connect Community?
Managing your accounting as a small business doesn’t have to be a nightmare.
Following these practical tips will help simplify your accounting, keep your finances organised, and help you stay compliant with tax regulations.
Here’s the plug 🔌
Arthur’s Consultancy works exclusively with the OMB Connect community and client referrals.
This means you gain access to a trusted network of resources, including expert accounting services. If you’re already part of the community or have been recommended by a client, whatcha’ waiting for? Let’s chat.
Our mission is to break down the silos and bridge the financial literacy gap. We plan to grow this blog and give away everything you could possibly need to know. Through OMB Connect’s dedicated courses, we walk you through real life examples of registering, preparing and filing your own self-assessment tax returns, sole trader and company accounts and so much more!
Are you in, or are you in?
This ain’t a disruption. It’s a revolution.