Setting up a brand-new business is an exciting prospect. But it’s a huge amount of work, as you might expect. And you won’t be able to just do the thing you’re good at, or what you’re selling. Not straight away, anyway.
Beyond creating your business plan, branding, and arranging your products and services, you also need to be aware of the financial steps you need to take when starting out.
There’s quite a few. But they’re all essential. As a result, this can become overwhelming very quickly, so to help you out, we’ve created a quick guide to help you get started.
Choosing a bank
It’s important to open a separate business bank account right from the start. Trust us – it keeps things far easier to manage. Thanks to COVID, opening a bank account can be a little challenging at the moment. However, one of the easiest ways to do so is through an online challenger such as Starling, Tide or ANNA.
Online banks make it easy to set up an account and conduct business wherever you happen to be, and you’ll gain access to your accounts and transactions via their super simple apps.
Getting your bookkeeping sorted
It’s important to track your expenses and sales from day one, because this will help with business projections and for when the time comes to complete your tax return. And no, that’s not just putting your receipts in a shoe box and keeping it for a year!
Bookkeeping doesn’t have to be complicated. These days, there are a tonne of apps and services that will make your life easier.
Take Xero, for example, which is commonly used by small businesses to keep on top of their bookkeeping in an easy-to-understand and efficient, cost-effective way. It’s really worth taking a look at if you want the easiest ride possible in terms of accounting.
Deciding on the tax structure
When setting up your business, it’s important to choose the business structure that best fits your organisation, and get to know the tax implications that come with it.
For instance, you might be intending on running the business by yourself, in which case, registering as a sole trader might be best. However, sometimes, a limited company might make more sense, depending on your aspirations, expected turnover, and circumstances.
If you’re unsure, speak to a qualified accountant. They’ll be able to help you understand the implications of each tax structure and help you with your selection.
Decide if you’re going to bring in staff
One important question to consider is that of employees. Are you planning to run the business yourself, or do you need others to work for you? This is important for insurance and tax purposes, as well as budgeting.
As soon as you go beyond just yourself as the sole employee, it’s best to speak to an accountant to find out what you’ll need to do regarding payroll, pensions, and the other financial elements that come with employing a team.
Getting the right insurance for your business is vital in order to protect yourself and your assets.
Most businesses require public liability insurance and professional indemnity insurance. On top of this, most modern businesses now have cyber insurance, too – a must in the age of digital communication and the countless ways your business can unfortunately be targeted by cybercriminals.
Lastly, if you choose to hire employees, you’ll need insurance for them, as well.
Get an accountant (a good one!)
You’ll quickly find that a good accountant is the most useful person to have on call when setting up your business. This is because they’ll possess an invaluable knowledge of taxes, regulations, rules, and general bookkeeping duties that will help you on your way.
Accountants do, of course, come at a cost, but it’s one of the best investments you’ll make in the future and financial security of your business.
Get to know your filing deadlines
It’s important for every business owner to know when they need to file paperwork or pay wages and taxes. Everyone’s year-end is different, but there are some commonalities to be aware of:
- Your yearly accounts will be due nine months after your year-end;
- Every 9 months, you’ll be subject to corporation tax (the return is due for filing 12 months after your period end;
- The deadline for your personal tax return is always 31st January, after 5th April.
You’ll also need to ensure that your payroll is filed on time every month. Missing any of these deadlines can lead to penalties which are a great inconvenience and can seriously impact your cashflow.
If you follow our steps above (and get yourself that good accountant) you won’t have to worry about any of these financial matters. Your accountant will do the work for you, leaving you with plenty of time to focus on what matters and what you enjoy.
If you’re stuck finding the ideal accountant, just get in touch with the team at Trinity.