Ensuring that the accounting administration is intact is the first step of running a business.
Though accounting might sound a little monotonous yet it plays a pivotal role in monitoring and maintaining money productively so that the owner of a business can gain understanding on which section of business to outsource, which element to automate and which professionals to contact to take right advice pertaining to business performance and success.
There are accounting services for small businesses in the UK available that assist in training on various accounting methods, developing apps etc. and help in building up an organised financial health of the company.
Accounting services provided by firms in the UK and specifically in London for small businesses are:
1. Business bank account opening
Once business is registered, it is essential to know where to keep the income.
Although It is not legally required of the owners of limited companies to have a separate business
account, it is highly recommended that they have one.
Separating personal bank account from business account smoothens work during tax filing. One doesn’t have to worry how to clear up personal and business finances during tax season as these would be accurately placed in separate accounts. Apart from this, such separation of accounts helps the owner, the bookkeeper as well as the accountant to track the growth of business.
When setting up business for the first time, it is recommended that one should opt for a bank which caters to specific needs of the owner vis-a-vis availability of local branch, easy accessibility both online and in person. One should also figure out if the bank’s software would seamlessly assimilate with the online services and apps that are used for business finance management of the company. Having two separate business accounts, savings and current, will assist set up company’s money like keeping revenue in current account and keeping a part in savings account for tax purposes.
And once the business starts functioning well, one could think of taking a business credit card. This
will not only boost the business credit rating of the company but also help in getting other benefits like accrual points, cash back bonuses, rewards etc. that which can further be utilised in other sectors of business.
2. Expenses Monitoring
There are several business expenses that are tax deductible. However to avail this facility a company is required to document its expenses properly:
The following documents are to be kept accurately:
- Bills
- Bank and credit card statements
- Invoices
- Receipts
- Cancelled cheques
- Proof of payments
- Financial statements
- Previous tax returns
Expensify app allows taking pictures of the receipts and stores them without having to worry about
losing information during tax filing time.
Large volumes of digital receipts could be stored online with full security in Google Drive, One
Drive, Evernote, Box etc.
3. Building bookkeeping structure
Bookkeeping must be done religiously at least every month even though it might seem tedious and
boring.
Usually the following methods are adopted for bookkeeping:
- An accounting software or excel spreadsheet could be used to do bookkeeping all by one self if the company is a small startup with limited expenses every month.
- One could outsource the bookkeeping task to a service provider so that the owner could focus on other important concerned areas of business.
- Bookkeeper could be hired to work in house if the business could actually sustain it where the owner seems to be investing extra time on bookkeeping each month.
4. Collaborating with an Accountant
One of the accounting services in the UK is availability of an accountant who can provide his expertise to small businesses with negotiations on lease, managing cash and treasury and ongoing cash reporting.
Accountants usually provide free consultation and hence there should not be any hesitation on part of the owner to meet him personally so that the exact business needs could be addressed. Accountants generally charge on hourly basis. However some take monthly fees.
5. Payment Mode
All the transactions are not done in cash these days. Hence a proper channel of payment either online
or in person has to be decided upon.
- Payment through Point of Sales (POS) system and in-person: Mobile system like Square could be
used to make a mix and match payment as this does not involve processing of in-person payment in
large number. - Payment only through POS: For such payment, a POS system that does transactions side by side a
cash register or a standalone credit card reader could be adopted. For this the owner needs to have a
merchant account with his bank. This account acts as a mediator between the business account and
the payment system both while depositing as well as withdrawing money. - Online payments only: Stripe is a great platform for online transactions and Shopify works best for
transactions based on ecommerce.
6. Payroll system set up
Hiring contractors and employees increases with the growth of business. Payroll is an important job that can consume a lot of time, money and energy and could divert attention from running business. There are many great platforms that come with several advantages related to payroll taxes, integration of worker’s compensation and benefits etc.
7. Tax Accountability
Sole proprietors, directors and partnerships and Corporations all are independent entities and have different modes of filing their taxes. Whether they are to file taxes quarterly or not and if any other tax obligations and compliances are to be met are some of accounting services available in the UK.
8. Refining methods
A business model needs continuous growth and a regular review, particularly of accounting jobs. Long term success of business can be maintained only when an effective and a competent system is in place that takes care of profitability and the bottom line.
When a proper accounting system is in place, it saves time, money and energy and a sustained growth can be realised without having to bother about the unnecessary workload which otherwise comes due to lack of a proper accounting procedure.
