Accounting Bookkeeping for Startups Leep Accountants

how to do bookkeeping for startup

One way to do this is to use cloud storage to keep all your documents in one place. This makes accessing and sharing information with your accountant or bookkeeper easy. When you’re running a startup, it’s important to keep on top of your accounts receivable. This means collecting debts on time and using accounting software to help you stay organised. Accounting software can also categorise expenses and revenue streams to help you keep track of your overall financial patterns and uncover growth opportunities based on past data. You may review these patterns at any moment if you follow bookkeeping best practices and record transactions correctly.

how to do bookkeeping for startup

Sara Barnes took a career break and started a dog-walking business to battle her depression. Join more than 500,000 UK readers and get the best business admin strategies and tactics, as well as actionable advice to help your company thrive, in your inbox every month. Ready to start your own practice but need some help to make it happen? Download your free toolkit, which is filled with tips and advice to support you along every step of the way. You’ll need to register as self-employed with HMRC unless you are setting up a limited company. The reason why you need to comply with money laundering regulations is that as a bookkeeper, you need to satisfy a legal requirement to spot and reduce the risk of your clients laundering money.

Know when to outsource your bookkeeping

Still, now everything can be digitised, saving businesses countless hours every week. Keep control of your financial data
Few small businesses can afford to hire their own accountant, so most accountants work on a part-time basis for their clients. If they use quality online accounting software to manage financials, it makes collaboration much easier. Good software allows bookkeepers work on the same set of data as the accountant. They can both work together to deliver the best outcome and help your business grow.

  • Simply record each transaction as income or expense and add to or subtract from your cash balance to keep track of your inflows and outflows using single-entry accounting.
  • With Numilo as your trusted partner, you can focus on growing your business, knowing you have real-time access to your financial status.
  • As for expenses, the key is to ensure that you have a universal system in place for all claims, and that a record is kept for each claim.
  • Double-enter accounting records each transaction in two accounts, debit and credit to ensure that your income, expenses, assets, and liabilities are in balance.

Make sure all bank statements and invoices (purchase and sales) are present and correct, and in date order. Otherwise you’ll be paying your bookkeeper for the time taken chasing down and sorting these documents, when it’s easy to do yourself. Worse, if documents go missing, then you could end up facing a fine for late filing. We teach bookkeepers how to create successful, profitable businesses that work around their lives. We know firsthand how tough it can be to build a business, especially in this industry where you might be afraid to ask for help.

Create a Chart of Accounts

Receipt recording in these applications is simple, but you must enter receipts weekly or even daily if you receive a lot each day to ensure an accurate financial picture. You should keep track of all your receipts, no matter how trivial they seem. Accounting is more than just hiring a reliable small business accountant to handle the numbers for you; it’s also about the suitable systems to ensure that your finances are accurate and well-managed.

Do startups need a bookkeeper?

Bookkeepers are helpful because they can focus solely on maintaining accurate and timely records, whereas startup founders often have to juggle bookkeeping with running a business. If your business has more transactions than you have time to track each day, hiring a bookkeeper is probably a good idea.

As a scrappy startup or scaling venture, you need to have someone on the team that can help bridge the gap between operations and finance. That means putting in processes that can help you scale, developing systems that help identify when things are moving, like identifying revenue churn or understanding how acquisition costs drive revenue. It also means that all the essentials needs to be carried out, such as bookkeeping and accounting. Our online finance function provides you with exactly this solution so you are perfectly lined up for scale. Implementing exemplary accounting practices is crucial to any startup business. It can help with financial security, economic growth, and success of future ventures by providing accurate information about spending habits or potential risks in situations like an audit.

Keep Track of Your Cashflow

Qualified and registered accountants might call themselves CCAs (Chartered Certified Accountants), CAs (Chartered Accountants) or other titles. If you make a purchase through the links on our site, we may earn a commission from the retailers of the products we have reviewed. This helps to provide free reviews for our readers. It has no additional cost to you, and never affects the editorial independence of our reviews. For more information on this, speak to your accountant, check out the page on expenses and benefits for employers, or seek specialised guides like this What is a P11D form?

Our financial reporting means you can make business decisions in confidence. There are essential costs you will have that keep your business running. If your business is a tech startup, for example, you will have various hardware and software costs that come with the territory. Company formation
As noted in our guide about hiring an accountant, you should use an accountant to help you set up your business. Accountants can help you create your business plan and set up a company structure that best suits your business.

You’ll need receipts to substantiate your claims from HMRC, so keep them stored somewhere safe and organised in different business categories. Never make late payments (especially to HMRC) and give your clients a payment deadline so you can chase them effectively. Take note of any late payers and consider not working with them if they keep missing payments. This is called credit control, and the aim is to keep your cash flow healthy. In the March 2021 Budget, the UK government announced an increase in the corporation tax rate from 19% to 25% starting from April 2023.

how to do bookkeeping for startup

The AAT also has a range of bookkeeping qualifications with the highest certificate allowing you to become an AAT licensed bookkeeper. The highest certificate will allow you to use the letters AATQB (as you’re an AA bookkeeping member) after your name. If you’ve always wanted to be a certified bookkeeper – and that’s your ultimate aim – there are options to do so by studying for the relevant certificate and diploma courses through accredited providers such the ICB.

All businesses in the UK are liable to pay either Income or Corporation tax. If you started your business as a sole trader, this means that you are self-employed and managing your own enterprise. Being self-employed needs submitting your self-assessment tax return and paying taxes by January 31st following the year that you started running your business. We understand that taking the first step can be overwhelming, as there are many things to consider when embarking on your business journey, such as managing your finances effectively. Entrepreneur – VAT Registered – This package will include all your bookkeeping requirements with a fix monthly low fee to establish your new business whilst keeping your cost low (up to 15 invoices for each category).

  • Instead, fixed assets are governed by capital allowances, which essentially means that you can subtract some or all of the value of the asset from your profits before you pay tax.
  • Take note of any late payers and consider not working with them if they keep missing payments.
  • Second, your Balance Sheet shows off all assets owned by the company name along with their current value while also considering debts owed (owed refers to liabilities).
  • By keeping accurate records, you’ll be able to see exactly how your business is doing financially.
  • Generating reports at least once a month is the surest way to stay on top of your business finances, and ensure you don’t get caught out by nasty surprises.

It is essential to run a P&L account regularly so you can keep track of your performance and make adjustments where needed. When setting up your accounting system, be sure to include all of your business-related expenses. It’s also important to track your revenue, so make sure you include all sources of income in your accounting records.