Keep all your business related receipts. In the early days you may think it’s not worth keeping expense receipts, as there’s not enough income coming in. This is a mistake as these losses can be carried forward and set off against future income.
Find a place to store them. If you can’t stand clutter, scan your receipts and create files on your p.c. or even better in the cloud. If like me you love stationery, get yourself some gorgeous files. For businesses with not many expenses or space, keep it simple and just have an envelope for every month.
Get a separate bank account
It will save you time and effort if you separate your business and personal finances a.s.a.p. For a limited company, you must open a business bank account. Shop around, some banks offer free banking for up to 2 years. Moneysupermarket.com summarises the best business bank accounts on the market. If you’re a sole trader with not many business payments and receipts it may be possible to use your personal account to save on bank charges. (Check the terms and conditions of your bank that this is ok, as some banks do not allow it). However, any savings made on bank charges can soon be lost in time and energy spent wading through your personal bank statements for business expenses at the end of the year.
As well as keeping receipts, keep a note of all your business trips. Keep a diary and record trips to your accountant, bank, networking events, training etc as well as the more obvious trips to clients and suppliers. You don’t have to work out mileage, just note the trip and use a route planner (like google maps) to calculate it later. Record all your cash expenses like postage and parking too.
Get on with it
Stop putting it off and get on with it. Keeping on top of your accounts will save you time and tax in the long run. Getting into a routine of emptying your purse, glove compartment or pockets regularly will pay off at the end of the tax year. Raising sales invoices promptly is essential for cashflow and shows customers that you’re professional and efficient.