Valuable accountancy tips for your business start-up
If you have plans to begin a business start-up, you’re probably well aware that there are a lot of things to think about. There’s one aspect of running a business that people often get stressed about, especially if they don’t know much about it, and that’s accounting. Keeping the books balanced and making future plans for your business’s finances can seem intimidating. That’s where our tips for business start-ups will come in handy!
Track every income and expense
It is incredibly important for your business’s records to note your income and your outgoing expenses. Good advice is to be as meticulous with this as possible, even a small cost like a packet of pens goes towards maintaining your company’s finances. Your income statement can help you see what you are taking in as opposed to your outgoings, which can consequently help you identify aspects of your business that are doing well and what you can improve on.
Keep a balance sheet
A balance sheet is your company’s financial statement. This outlines your assets, liabilities, and shareholder equities. Further to your income statement, your balance sheet will provide you with valuable information about your financial position. Starting your first balance sheet for your new company will allow you to have something to compare against when it comes to making a balance sheet for another period, when your business is more established.
Save for taxes as you go
Taxes are something that often intimidates people when they go into business for the first time. Depending on the size of your business, you will need to set a certain amount of money away every year to pay your tax. If you do this as you go, rather than having to scrounge together some money at the end of the tax year to pay your bill, it will result in much less stress for your company, and you can be safe in the knowledge that you are financially capable of paying this bill.
Create a separate business account
It may sound like an obvious thing to do, but many people leave opening a separate business account until the very last minute. Doing this in advance will reduce your stress levels, and having a separate business account is incredibly important. This will allow you to keep your company finances entirely separate to your own, and you can pay yourself a personal income from your business account. This also avoids any confusion at the end of the tax year.
Set a yearly budget and financial forecast
When you’re starting out your new company, it’s a good idea to devise a financial forecast for the first year of business. Setting a budget, as well as identifying where you want to be financially at the end of the first year of being in business, will help you set goals and stick to them. It will also help you identify what you can afford throughout your first year of business, whether this is employing a new starter or moving into an office space.
If these tips have helped you in knowing where to start with the accounting for your new business, our final piece of advice would be to consult an accountant. The aid of an accountant for your new business will help you make informed financial decisions for your company, as well as keeping the books balanced and in a good position. For expert accountants to offer you more advice, whether for individuals or for your new business start-up, get in touch with our team at Adams Accountancy on 01322 250 001 or email info@adams-accountancy.co.uk.
