No jargon. No spreadsheets nightmares. Just practical advice that makes life easier.
Bookkeeping might not be the most exciting part of running a business, but it’s one of the most important. Whether you’re self-employed or running a limited company, keeping your records in order can help you:
- Understand how your business is doing
- Avoid unexpected tax bills
- Make better decisions
- And stay out of trouble with HMRC
The good news? It doesn’t have to be difficult. Here are some practical, no-nonsense tips to help you keep on top of your bookkeeping all year round.
1. Open a Separate Business Bank Account
If you’re still using your personal account for business income and expenses—stop! Mixing personal and business finances can make bookkeeping much harder than it needs to be.
Benefits of a business bank account:
- Clear separation of business and personal spending
- Easier to track income and expenses
- Makes things simpler at tax time
- Looks more professional to clients
Even if you’re a sole trader, a separate bank account is a smart move.
2. Keep Every Receipt (Paper or Digital)
You’ll need evidence for every business expense you claim. That means keeping hold of receipts, invoices, or bank statements that show what you spent, when, and why.
Top tips:
- Use apps like Dext, QuickBooks, or Xero to snap photos of receipts
- Label expenses clearly (e.g. “client lunch”, “stationery”, “website hosting”)
- Back everything up to the cloud—just in case
HMRC can ask to see your records up to 5 years after the tax year ends, so don’t throw them out too soon.
3. Track Your Income and Expenses Weekly
Don’t leave it until the end of the year—or even the end of the quarter. Set aside 30–60 minutes each week to update your bookkeeping.
What to log:
- Money coming in (sales, invoices paid)
- Money going out (suppliers, subscriptions, travel)
- Bank transfers and loan repayments
- Any cash payments or petty cash spending
Doing it weekly keeps things fresh in your mind and avoids the dreaded bookkeeping backlog.
4. Use Cloud Accounting Software
Modern accounting software does a lot of the hard work for you. It links to your bank account, tracks your income and spending, and generates useful reports.
Popular UK options:
- Xero – great for small businesses
- QuickBooks – ideal for freelancers and sole traders
- FreeAgent – especially good if you’re with NatWest or Mettle (free with certain accounts)
Many packages also offer features like:
- Invoice creation
- Receipt scanning
- VAT return generation (for MTD)
- Real-time profit tracking
Ask us if you’re unsure which software suits your business best—we can help you choose and set it up.
5. Set Aside Money for Tax
When you earn money through self-employment, no one is deducting tax for you. It’s easy to forget, until a big tax bill lands on your doorstep.
Rule of thumb:
Set aside 20–30% of your income for tax and National Insurance.
If you’re VAT registered or run a limited company, you may need to set aside even more. The sooner you get into this habit, the smoother your cash flow will be.
6. Reconcile Bank Transactions Regularly
Reconciling just means matching your records with your bank statements. This helps you:
- Spot any errors or missing entries
- Make sure no invoices or expenses were forgotten
- Get an accurate picture of your cash position
With cloud software, reconciliation can often be done automatically with a few clicks.
7. Don’t Leave It All Until the End of the Year
This is a big one. Many small business owners do nothing all year, then scramble to sort their accounts before the tax return deadline. It’s stressful, it leads to mistakes, and it could cost you more if your accountant has to rush.
Instead, aim for little and often. Or better yet—get help from a professional.
Keep It Simple, Stay in Control
Bookkeeping doesn’t need to be complicated or time-consuming. A few simple routines can save you hours down the line and give you peace of mind.
If you’re feeling overwhelmed, remember: you don’t have to do it alone. Whether you need help choosing the right software, setting up a simple system, or outsourcing the whole lot—we’re here to help.
📞 Need help with your bookkeeping?
Let’s make your numbers work for you—not against you.
Call us today or drop us a message!
