Running a business is full of ups, downs and lessons you wish you’d known from the start. We asked selected UK-based accountants for their top tips to help small businesses get ahead and streamline their processes. From keeping on top of your finances to taking full advantage of the technology available, here are five accounting tips from experts to help boost your bottom line.
To collect these nuggets of advice, we ran a quick survey among some selected, UK-based accountancy firms.
Lesson One: Use your phone for bookkeeping
This is an accounting tip we believe strongly in, so we’re delighted to see the experts agree.
“I would recommend ensuring you use a bookkeeping software to track your income and expenses as you go,” Emma Hardwick, manager at Plus Accounting told us. “This will help ensure no business expenditure goes unclaimed such as travel, mileage and cash expenses, which are a deductible against your taxable profits.”
With smartphones, you can carry your bookkeeping assistant with you wherever you go, for example, by using a mobile app or an online tool optimised for mobile browsers, such as arbitrue. This makes recording expenses and receipts on-the-go simple and efficient and means you don’t have to worry about losing receipts.
Recording everything on an app also helps your accountant to better manage your finances, Gemma Gaines, Accounts and Audit Manager at Hilton Sharp and Clarke, said.
Using your mobile phone alongside cloud accounting will make it easier and more efficient when it comes to year-end, and allows for real-time access to your financial data, which means better day-to-day management.
Lesson Two: Make sure you can claim all allowable expenses
Accurate expense management is one of the most important lessons for small businesses, yet so many of us are still unsure what expenses we can and cannot claim.
James Phillips, manager at Cardens: “Don’t lose your receipts and more importantly understand what you can claim for. As the easiest way to reduce your tax is to offset your true cost of running your company.”
Lucy Cohen, co-founder of Mazuma Money: “Keep everything. Keep it safe and keep it neat! You never know when HMRC might decide to investigate, and everything is a lot less stressful if you’re on top of your record keeping.
Put things in folders (manual or electronic) and label them with destruction dates in line with tax rules. That way, you’ll always have the right information to hand but won’t have decades of paperwork cluttering things up.”
Don’t forget to ask for VAT receipts and invoices for everything you buy, advises Zoe Whitman, founder of But the Books.
“Not having the correct paperwork means VAT registered businesses might not be able to reclaim VAT on their purchases and 20% here and there quickly adds up.”
Lesson Three: Keep on top of your bookkeeping
We’ve all been there. When faced with a mountain of receipts and invoices, it’s all too tempting to shut the lid and put it off until tomorrow.
Avoid procrastinating on your bookkeeping, and instead, make sure all your records are up to date, Alex Koupland, Manager at Plus Accounting, advised:
“Either scan all receipts or keep in an individual envelope for each trip or assignment so you can summarise when finished.”
“Keep on top of it!” Emma Hardwick said. “There is nothing worse than piles of receipts sitting on your desk or in a shoe box… Stop putting it off for another day. Put aside half hour a week to keep things in order.”
James Phillips: “Bookkeeping is best done little and often and therefore this is a great habit to get into. Not only will your bookkeeping take less time, but it will also allow you to run your company based on up to date information which will give you and your company the best possible chance to succeed.
Therefore, by linking apps, such as Arbiture, to an online accounting program like Xero, you will create a simple yet cost-effective automated system that will make this a reality.”
Lesson Four: Appoint a tax advisor
Gemma Gaines: “Use an accountant. An accountant will advise on where tax can be saved and ensure clients are making the most of available allowances.
A common example, often overlooked, is making a proper claim for having an office at home. We provide our clients with a helpful template and clients are always surprised at how much may be deductible.”
Lucy Cohen: “An accountant who is engaged with you and who can offer proactive advice (not just the once a year stuff) can save you way more than you’ll pay them in fees.
Look for one accountant who will do the full package – bookkeeping all the way through to accounts and tax returns. That way they are seeing the whole picture and can give you advice far more effectively than someone you see once a year.”
Check out our guide on how accountants can save you money.
Lesson Five: Talk to your accountant regularly during the year
“Ensure you take the time to meet with your tax advisor regularly so that you can consider all the potential opportunities available to you to mitigate your tax liability and plan ahead,” Luke Thomas, director at Plus Accounting advises.
This is particularly important when considering new projects, Helen told us. Your accountant will tell you whether your project qualifies for tax relief and whether you can claim now rather than waiting until year-end.
“I think many people don’t realise that they could be missing out on tax-efficient planning or even be non-compliant, so talking to your accountant will help”.
Many thanks to everyone who shared their accounting tips for this piece!
Looking for more advice on small business accounting?
We’ve written many guides on how to handle bookkeeping and accounting in a small business. Take a look at 11 business processes you can optimise with QuickBooks add-ons or daily habits that will develop your accountancy skills.