April marks the end of one tax year and the start of another, so now’s the perfect time to improve your financial processes.
Whether you’re self-employed and just keeping track of your own transactions or you’re running a Limited Company with several staff, here are some top tips on getting the financial year off to a great start.
UKBF partner ANNA Money has sponsored this article. If you need help with your VAT Return, check out their free, easy-to-use tool.
From keeping accurate accounts and storing receipts to filing VAT, automated software can now take care of much of the hard work for you, so you can stay on top of your financial obligations without the stress.
Accounting systems like Xero, Sage and Quickbooks automate much of the processes involved in bookkeeping, such as bank reconciliation, invoicing, bill payment and reporting.
Many of these tools can be quite complex and often offer much more functionality than necessary to keep your business affairs in check. You may want to look out for individual tools that can do a specific job or specialised small business-oriented accounting software.
If you’re thinking along these lines, ANNA Money had developed a number of free tools you can use to do exactly that, including a free invoice generator.
You could do so manually, by adding each invoice and expense to a spreadsheet and categorising them. However, the rise of open banking has created a big leap forward for accounting software, allowing you to connect to your business bank account to automatically pull in all of your transactions.
Tracking your expenses regularly makes it easier to stay on top of everything. Setting a time every week or month to do your bookkeeping helps make sure it happens.
Even with fancy accounting software, you are still required to keep records of your expenses, which can be digital. If you get a lot of paper receipts, it’s worthwhile making a habit of snapping a picture of the receipt or scanning them directly into your accounting software straight away.
A VAT return is a relatively simple calculation, in which all of the VAT you charged on your invoices is deducted from the VAT you paid on your expenses. The difference is owed to the HMRC or, if the difference is negative, you are entitled to a refund.
This can be done in Excel, if you are happy to list all of your transactions manually or you can use your accounting software, which can compile everything with the click of a button (assuming you have kept your accounts tidy!).
Beware that new MTD rules are kicking in this year, requiring all VAT registered businesses to file VAT returns using specialised software or bridging software, for those that want to continue their VAT return calculations in Excel.
If you’re a small business and opting for specialised software, like ANNA’s free tools, you can keep on top of your invoices, expenses, digital record keeping and VAT returns all in one place. ANNA generously offers a free plan which covers all business needs for small businesses.
Is your business operating efficiently? The new financial year is a great time to analyse where you can cut costs and make savings, especially in the current climate.
When using a car for personal and business purposes, the alternative method of claiming on fuel is paying a fuel scale charge via your VAT return, which then gives you the opportunity to claim all the VAT back on fuel and avoids you having to keep mileage records. If you’re new to this approach of claiming VAT on fuel purchases, read this helpful guide.
ANNA Money offers business current accounts for startups, small businesses and sole traders. They want to make your life easier and have made a range of free tools available, including one to help you get your VAT return sorted in no time.They also offer automated VAT return preparation. If you haven’t already, you should definitely ditch the spreadsheets and upgrade your business admin this year and they can help you do that!
Whether you’re self-employed and just keeping track of your own transactions or you’re running a Limited Company with several staff, here are some top tips on getting the financial year off to a great start.
UKBF partner ANNA Money has sponsored this article. If you need help with your VAT Return, check out their free, easy-to-use tool.
Get organised
Don’t underestimate the value of organisation in avoiding the pain that comes along with your financial year-end.From keeping accurate accounts and storing receipts to filing VAT, automated software can now take care of much of the hard work for you, so you can stay on top of your financial obligations without the stress.
1. Choose the right accounting software for you
If you’re using spreadsheets, it’s time to make your life easier and load up some software. Self-employed? Software saves you precious time on your bookkeeping. If you have a Limited company, you’ll need to produce a balance sheet alongside accounts too and it can do those calculations for you.Accounting systems like Xero, Sage and Quickbooks automate much of the processes involved in bookkeeping, such as bank reconciliation, invoicing, bill payment and reporting.
Many of these tools can be quite complex and often offer much more functionality than necessary to keep your business affairs in check. You may want to look out for individual tools that can do a specific job or specialised small business-oriented accounting software.
If you’re thinking along these lines, ANNA Money had developed a number of free tools you can use to do exactly that, including a free invoice generator.
2. Maintain tidy accounts
You have to keep up-to-date accounts to ensure you’re on top of customer payments and what you owe suppliers, as well as to provide records so you can be confident you’re paying the right amount of tax.You could do so manually, by adding each invoice and expense to a spreadsheet and categorising them. However, the rise of open banking has created a big leap forward for accounting software, allowing you to connect to your business bank account to automatically pull in all of your transactions.
3. Stay on top of your expenses
Most of the costs you incur as part of running a business – such as office rent, utility bills, employee salaries and the cost of equipment – are classed as expenses, which you can offset against your profit to reduce your tax bill.Tracking your expenses regularly makes it easier to stay on top of everything. Setting a time every week or month to do your bookkeeping helps make sure it happens.
Even with fancy accounting software, you are still required to keep records of your expenses, which can be digital. If you get a lot of paper receipts, it’s worthwhile making a habit of snapping a picture of the receipt or scanning them directly into your accounting software straight away.
4. File VAT regularly
Once you’ve registered your business for VAT, you’ll be required to submit regular online returns, which can be every month, quarter or year, depending on your scheme.A VAT return is a relatively simple calculation, in which all of the VAT you charged on your invoices is deducted from the VAT you paid on your expenses. The difference is owed to the HMRC or, if the difference is negative, you are entitled to a refund.
This can be done in Excel, if you are happy to list all of your transactions manually or you can use your accounting software, which can compile everything with the click of a button (assuming you have kept your accounts tidy!).
Beware that new MTD rules are kicking in this year, requiring all VAT registered businesses to file VAT returns using specialised software or bridging software, for those that want to continue their VAT return calculations in Excel.
5. Be ready for the year end
Staying on top of your business admin and accounts will prevent you from having a stressful end of the financial year.If you’re a small business and opting for specialised software, like ANNA’s free tools, you can keep on top of your invoices, expenses, digital record keeping and VAT returns all in one place. ANNA generously offers a free plan which covers all business needs for small businesses.
Make savings
Once you’re confident you’ve organised your accounts effectively, you can look at optimising your cash flow.Is your business operating efficiently? The new financial year is a great time to analyse where you can cut costs and make savings, especially in the current climate.
1. Switch energy suppliers
Energy is a big financial outlay. Look at switching your office’s heating and lighting suppliers, to see if you can make monthly savings on the cost.2. Claim your fuel costs
With the rising cost of fuel, it’s more essential than ever to keep track of your accurate business mileage, so you can expense it – especially if you’re a self-employed taxi driver or run a haulage business (read the government guidance here).When using a car for personal and business purposes, the alternative method of claiming on fuel is paying a fuel scale charge via your VAT return, which then gives you the opportunity to claim all the VAT back on fuel and avoids you having to keep mileage records. If you’re new to this approach of claiming VAT on fuel purchases, read this helpful guide.
3. Purchase second-hand assets
Not every piece of equipment you own for business use has to be brand new. Save on purchases by looking for pre-used items that have a lower price tag.4. Boost productivity
Are you using the tools that make you most productive? Time is money, so look for ways to automate or speed up processes. Like using Tradify, an app for self-employed builders that can help you to manage jobs and streamline workflows.5. Note tax return deadlines
Failing to meet deadlines for filing tax returns and your accounts or paying your taxes can lead you to incur fines and interest. Keeping key dates in your calendar will help you avoid these unnecessary charges.- If you are self-employed, you have to file your Self Assessment by the 31st January after the end of the tax year it applies to.
- If you have a Limited Company, the deadline for your Corporation tax return is 12 months after the end of the accounting period it covers (this accounting period is usually the same as your company’s financial year, which starts on the date you started trading).
ANNA Money offers business current accounts for startups, small businesses and sole traders. They want to make your life easier and have made a range of free tools available, including one to help you get your VAT return sorted in no time.They also offer automated VAT return preparation. If you haven’t already, you should definitely ditch the spreadsheets and upgrade your business admin this year and they can help you do that!
