When you are running a business there seems to be a thousand things a day that pull you in all directions. That means you probably don’t have time for seemingly trivial questions about VAT on your car repairs or getting granular with the ins and outs of your abridged accounts. You want to be focused on your long-term financial goals and building your business. We understand and that’s why we are always happy to help you with planning. We often say to our clients that keeping your finances in order is a two-way partnership. We do everything we can to make your accounts are the best they can be when you submit them but there are a few common problems that we see repeatedly. As we head to a new budget, a new tax year and everyone is looking to a relaxing of lockdown, now seems a good time to gently remind you of some regular good practice.
Keep things neat and have all the details
Accurate accounting is often about having the information you need, when you need it. Income and expenditure are much harder to catch up on than to keep up to date as you go. Without a clear line of sight on what you spend and what you earned you could end up paying too much or, worse still, not able to provide the information for HMRC.
Keep your e-receipts as well as your physical ones
Following on from the last point, e-receipts sound easier but they can still be a problem. We all thought it would be easier when everything went online but the truth is that you can lose your digital receipts as easy as you can lose a printed one. People often don’t download them thinking they will get them later. It is worth adding them to Xero immediately you buy something or putting the .pdf files in the cloud so you will be able to easily find the receipt. It’s frustrating when you are fishing through emails trying to remember where you purchased some small item.
Personal and business – Never the twain
Your personal affairs and your business affairs are two very different things. Remember anything that the business pays for on your behalf could be considered as pay. One easily made mistake is to accidentally put personal expenses through as well as allowing the business to pay for them. Travel is a common area for this to happen with accidents like business cards being used to pay for train tickets that are then put through as personal expenses and so on. While we are on the subject of personal expenses though, remember to think about P87 forms for employees who have been working from home.
Get used to the deadlines
It’s worth committing the deadlines for submissions to memory. We’ll get everything ready for you, but you may be asked for additional information for the return if we need it. Knowing the deadlines will also help you forecast your cashflow. Which brings us to…
Keep on top of your forecasting and P&L reports
The best way to avoid nasty surprises at tax submission times is to be really up to date with your current situation as you progress through the year. Getting to year end and then finding you have an unexpectedly large tax bill is not pleasant.
We are always here to help but it’s much better for everyone if you can keep these few guidelines up to date. That way when you need us, we can concentrate on helping you grow rather than firefighting at tax return time.