In a nut shell, If your records are in order, your accountant won’t have to do as much work to do your accounts and this will save you money. Below are some handy ways to improve your records and save you money.
Keep Business and Personal Accounts Separate
Ideally you should have a separate business account for all business expenses and transactions. If you are a trading as a Limited Company this is a must and whilst its not a requirement for a Sole Trader, and as tempting as it is to avoid the bank charges, it is good practice and may save you money in the long run by making it easier for your accountant at the end of the year.
You might also want to consider a separate credit card in the name of your business.
Keep all records.
Your receipts, statements, and transactions will help you claim the maximum deduction on your taxes. Keep them organised and stored somewhere safe until the end of the year. Make sure if you are missing any bank statements that you print them off before you take them in. This will help speed up the process of getting your accounts done.
Knowing what is allowable for tax is not always straight forward and there are many complex rules. HMRC state that an expense must be Wholly, Exclusively and Necessarily for the purpose of your business to be allowed for tax, but as you’d expect there are a lot of strings to this.
Invest in Accounting Software
Investing in the right accounting software can make bookkeeping easier and allow you to concentrate more on your business. As HMRC’s initiative “Making Tax Digital” approaches, nearly all businesses will have to record their transactions on accounting software. The sooner you make the move to digital software, the easier the process will be.
There are many cloud based software solutions out there. We specialise in QuickBooks as we think it’s the most cost effective and the most simple out there. It also gives you the ability to link to different apps such as online timesheets or direct debit functionality to help make your business more efficient. If required we can help you make the switch over and give you some initial training.