Is this the year that you’ve decided to take the plunge and go it alone? Or is your great idea at the stage where you’re ready to take it to market?
Starting up a business is exciting and daunting and there is so much to think about and so many decisions to make.
Alliotts Tech Team specialise in working with tech start ups, helping them find them find the answers to questions such as ‘How do I set up a company?’ ‘What type of entity should I choose for my business?’ ‘What do I do about business tax planning?’ ‘What’s a shareholders agreement and why do I need one?’ ‘Am I eligible for R&D tax relief, or any other incentives?’ And a whole host of other questions. When a business is setting up from overseas we also help them get to grips with understanding the UK system.
When it comes to the day to day running of a business, book keeping helps you keep track of what goes out and what comes in. It’s important to keep on top of it, but when you are starting out, it’s easy to overlook. Here are some of the common mistakes that we’ve seen start-ups make,
Doing it yourself.
Unless you know what you are doing it’s probably a mistake to do your own bookkeeping. It’s best to get some training or hire a professional bookkeeper. Accuracy in your financial recording is crucial. An experienced bookkeeper will help ensure that your books are correct and up to date. This will save you time and money. Believe me.
Failing to report all financial transactions.
You may make a financial transaction and forget to record it. Let’s say you bought office supplies or had coffee with a client but forgot to tell the bookkeeper or give them the receipts. Not accounting for certain expenses will mean paying more tax than you need to. Even small expenses can mount up, so record of every penny your business spends.
TIP. Receipt Bank can be a useful if you are on the road. All you need to do is take a picture of your receipt. Receipt Bank will then send the transactions to your accounting software.
Forgetting to check your bank statement agrees with your books.
When your bank statement comes in, you should check the entries against what’s in your books. This will help you spot any errors or anomalies. The totals on the bank statement and your books should agree and therefore confirming all the entries are accounted for.
TIP. Consider a cloud accounting solution such as Xero which downloads bank transactions automatically each day and also integrates with Receipt Bank.
Not having a separate account.
Even though you own the business, it’s best to maintain separate bank accounts for your personal and business finance. This keeps everything less complicated.
Not having a filing system for purchase invoices.
Have two files – one for paid, one for unpaid invoices. When you settle an invoice, write the date and method of payment on the invoice. Once paid, move it to the paid file. Keep both files ordered alphabetically by supplier name. Simple good housekeeping which will save you time hunting through a mountain of paperwork in the future!
If you would like to make 2017 the year of your tech start up and would like to speak to someone who can help you through the decisions you’ll need to make, I'd be happy to help.