On this page, our qualified accountants have looked to list a few “dos and don’ts” of small business accounting. We hope that both new Eastleigh start-ups and established SMEs will be able to learn a thing or two. Need further advice from our friendly chartered accountants, perhaps regarding your payroll system or VAT returns? Pick up the phone and give us a call.
6 Dos and Don’ts of Small Business Accounting in Eastleigh
- Do keep track of your basic income and expenses. If our accountants are keeping your books for you, then check in regularly to see where you stand. You want to know what you can afford and ensure there’s no nasty surprises at the end of the month. If you don’t have chartered accountants bookkeeping for you, then obviously you’ll need to be more thorough. Keep receipts and invoices, and never get “too comfortable” with the state of your finances. Even the most successful businesses in Eastleigh are wary of frivolous expenditure and allowing margins to narrow too much. In fact, often that’s what makes them successful!
- Don’t take financial advice from a third party that lacks credentials. It’s always worth doing some research to find out if the person you’re speaking with, whether they are one of Eastleigh’s many solicitors, accountants or independent financial advisers, is qualified to do so. Receiving bad advice on issues like VAT returns, payroll or finance could be disastrous. Do some research online and find out what others are saying about the individual or firm in question.
- Do file VAT returns on time. Enlisting our Eastleigh-based chartered accountants is one way to ensure your VAT returns are completed within the deadline. But if you decide to handle them yourself, keep an eye on your calendar and give yourself plenty of time to complete them. While you’ll be let off the first time you late file VAT returns, the penalty will start to add up the more you’re late. Eventually it will equal 15% of any VAT due, a potentially hefty fine that could do a lot of damage to your business.
- Don’t mix your business and personal funds/assets up. For example, by sharing a bank account. It’s important to draw a distinction between the two, which will help you keep an accurate understanding of your business’s performance and also ensure you benefit from any tax relief you could be eligible for. Likewise, handling payroll through your personal account can be financially devastating if your business has had a slow month (which is almost inevitable, at some point).
- Do consult chartered accountants when first starting up your business. There’s a lot we can help you with, including business plan preparation, securing finance, setting up a payroll system, filing VAT returns, bookkeeping and much, much more. One of the biggest mistakes we find with clients who’ve got themselves into a dangerous situation, is that they waited until it was a crisis to bring in our accountants. Often, it’s “too little, too late” in these situations. Consult with us early on, to reduce the likelihood of making mistakes and increase the chances you’ll become a strong and formidable Eastleigh business.
- Don’t rely on a verbal agreement when purchasing items from a supplier, or indeed procuring a service from them. While you may be sure that they’ll keep their word, it’s always worth having everything in writing. This safeguards you against any potential legal trouble that may occur from a supplier or tradesmen who was “expecting more money” or similar. Many businesses forget that the law has little time for hearsay, and loves a good contract!