5 Accounting Tips to Kickstart Your New Business

November 10, 2023

Starting off in business can be an exciting time. There’s so much to get in place even before your new business starts trading and you must be wondering “Just what do I need to do to start a new business?”

Well, that’s what we’re here to help you with. At Excel Accountancy, we specialise in growing businesses and where better to start than at the start itself with our top tips to get your business underway.

Excel Accountancy Ltd (Liverpool) blog header image with blue background, text saying "Start your bussiness off on the right track" and a graphic showing a trending graph.

Choosing a logo. Designing brochures. Fitting out your new premises. It’s a hectic time when you’re starting a new business with so many things for you, the founder, to think about.

And accountancy might not be at the forefront of your mind. We get it. Not everyone finds it as interesting as we do. But get the accountancy basics right and your new business will be stronger, you’ll have more management information and you may even pay less tax – perfectly legitimately. So grab a cuppa and check out our top tips to getting it right & saving yourself business hassle.

Step #1 - Open a Business Bank Account

One of the first things you should do when starting a new business as a sole trader is to open up a separate bank account for your company. This will help you keep better track of your finances and avoid confusing personal and business expenses. Not to mention that some banks get annoyed if you run a business through a personal account.

Of course, if you’ve set up your business as a Limited Company then that definately needs its own business bank account as it’s a seperate legal entity to you.

Mixing your personal and business finances is a big mistake because tracking your expenses and income, managing your cash flow, and preparing your financial statements is much more challenging. So, open up a business bank account immediately after starting your company and ensure that your records are crystal clear from the get-go.

Track your expenses – even before you open

Another important accounting tip for new business owners is tracking expenses before launching the company. This gives you a good idea of your overhead costs once you’re up and running, making cashflow plabnning much easier – even if it’s bad news just how big the electric bill might be! You may also be able to deduct some of these expenses from your tax bill and tyour accountant can advise on that one.

Accounting software like Xero, QuickBooks or FreshBooks is the best way to track your expenses. Including things like office supplies, marketing materials, website costs, and any professional services you may need to help get your business off the ground.

Just because an expense happened before your first customer doesn’t mean it’s not part of your business costs to offset against tax if it’s definately an essential part of getting ready to trade so record it all and make sure you keep the paperwork!

Hire an Accountant or Bookkeeper

Hiring an accountant or bookkeeper is one of the best things you can do for your new business. It pays to have a great accountant or bookkeeper on your side before you launch, so take your time with this decision. They’ll be able to help you set up your systems, track your expenses, prepare your financial statements, and ensure that you choose the right structure for your business.

Once up & running, it’s tempting to try and do absolutely everything yourself to save money but that can be false economy. You’re better doing what you do best and let other people take on the headaches of book keeping & accounting – you may well save more than you spend.

If you don’t have the budget to hire someone full-time, you can outsource your accounting and bookkeeping needs to a part-time or virtual accountant. This is a great way to get the expertise and support you need without breaking the bank.

However, be wary that accountant is an unregulated term, meaning that any old cowboy can claim the title! Be sure to look for a professional with respected accounting qualifications and plenty of testimonials. Dirt-cheap prices are usually a warning sign so do your research. Speak to the accountant and don’t be afraid to ask some probing questions.

Setup a Payroll System

If you’re hiring employees, you’ll need to set up a payroll system to administer your PAYE tax records. This helps you pay your staff on time and accurately as well as deducting the right amount of taxes to send to HMRC.

Many different payroll software options are available, so do some research and choose the one that best suits your needs.

Chose how you want to spend your time & remember, you can always outsource payroll to a trusted accountant!

And finally, Step #5 : Understand Your Tax Obligations

Even if you have an expert accountant handling your tax returns, knowing and understanding your tax obligations as a business owner is still important so you can mentally plan for future tax demands.

The good news is that a great accountant will take the time to ensure that you understand your tax situation sufficiently while they handle the technical side of things.

Our Final Thought: When starting a new business, set yourself up for success with solid accounting procedures.

When you build your business on a strong financial foundation, the rest of the journey will be much more straightforward and you can focus on the aspects of your new business that you enjoy & get you fired up!