7/24/2023 10:08:00 AM by Chapter Bookkeeping

Are you considering being self-employed and need some ideas on what is involved in setting up the business accounts?

After you have the idea for your new self-employed adventure or have already started one, your mind may be very excited but need help figuring out where to start.

A good financial accounting system foundation is essential. Just as important as having a business plan or strategy. Ensuring the accounting side is set up well is vital in knowing how the business is doing and can help to work out what profit it could make. It will help with future decisions like how you want to grow your business. Understanding your financials can help you know what is or not working for you and the company and whether you are one day ready to sell the business.

Whether an online business or not, You need to figure out if you want to do the bookkeeping or outsource to a bookkeeping service now or later as the business grows. Outsourcing can be a great decision whenever you choose, as it will free up your time. No one bats an eyelid if someone outsources the cleaning, so your accounts are no different.

 I am looking forward to outsourcing the fish tank cleaning as it can be time-consuming, especially the monthly filter cleaning. Plus, they will know the best set-up when I change from gravel to sand, etc.

   But the first thing is to register with HMRC as self-employed by the 5th of October in your first year of business and have a turnover of £1000 or more, but check with HMRC for the details of setting up as a Sole Trader.

Business bank account

The business needs its own bank account. This is important to the business and you as:

A) Keeps the business finances away from personal finances as it is its own entity.

B) If you have a bookkeeper or accountant that charges by transactions, having your business finances run out of your personal bank account will cost more plus, they can see all your personal purchases. There are some things you don’t want others to see. Buying for Christmas or birthdays could give the game away.

Cloud accounting

There are many cloud accounting services available, and if you are not starting out with a bookkeeper or Accountant who can advise you on what they recommend or use, then do some trials and see what a good fit for you and your business. With Cloud accounting, you can have your bank statements, bills and expenses in one place without hunting for this receipt or that statement. It will all be under one digital roof.

A receipt captcha is an excellent tool because as soon as you make a business purchase in a shop, for example, snap the receipt in the mobile accounts package app, and it is there for you or your bookkeeper/accountant to match up to the bank statement. One tip is to have an envelope or wallet that keeps the receipts crinkle-free, especially if you do not take a photo immediately.

I keep a zip-up wallet, as I keep my receipts, so it makes easy storage for that accounting year. The same goes for bills, I fully get we are going into a digital way of life, but the old habits can be hard to let go of. I was brought up being told to always keep a paper trail just in case.

 I store my paperwork and receipts in fun folders with dividers because who said your accounts have to be held in plain coloured folders, not that there is anything wrong with a coloured folder?

Alert, I know this has not only happened to me.

One of the biggest lessons I have learned with computers is to make sure you back everything into the Cloud. I know some people will back up onto a memory stick, but I worry if it gets corrupted, all will be lost, and only leaving everything on a computer can truly spell disaster, as I have recently had to happen to me.

 Luckily the only bits saved to my computer were pictures I had made up and downloaded. Some were in the Cloud but had some on the PC itself, and the PC went white-screened and was unresponsive, so it had to be sent to the computer hospital for repairs, where it was totally wiped clean.

This is my very first blog post, I hope it was helpful, and I look forward to doing some more with tips and not just on bookkeeping.

A tip I learned this week was how to get cooking oil off the outside of a glass bottle. It was with hand sanitiser, and I seriously thought this was a nuts idea, but hot soapy water was not working. It totally blew my mind as it had worked. It was the alcohol content that just melted the oil away.

If you are curious about how well we can work together or what I can do for your business, please book a call and let's have a chat. https://chapterbookkeeping.uk/contact/ 

This is a guide and should not be solely relied upon; please do your research. We accept no responsibility for any decisions made based on this article. Please seek professional advice.