An intro to Elaine
Elaine Clark is the founder of Cheapaccounting.co.uk and all-round self-employed and small business accounting specialist. She’s helping us to combine accounting services into the Coconut product, making the first full service business current account for self-employed people and personal business owners.The features we’re planning to launch are accountant Chat, if you want to ask any questions through the app, and Review and File at year end. We’ll be working with Cheapaccounting.co.uk to make sure we deliver a really high quality experience.Here’s some thoughts from Elaine.
Keeping your accounting costs to a minimum
When you first set up your new business it’s highly likely that you may have a few questions about accounting and tax.What can you claim? When do you need to register with HMRC? What taxes will you pay? When are your tax returns due?At the outset it might feel like you need an accountant on board to ensure that you're on the right track and don't get caught out by any reporting deadlines. But for many self-employed people and personal businesses starting out funds are short and other pressing priorities have preference over spending on accountancy fees.
All is not lost!
If you find yourself in this position it’s usually best to set out a plan for exactly what you need accountancy support for and what you can do yourself. Hook up with an accountant who is prepared to work with you to keep your accountancy fees to the level that you can afford, or I’ve provided some tips for you to hold off until you really need one.
What I love about Coconut
The reason I’m working with Coconut is that it really solves a problem in the early days which I’ve seen many times. By using Coconut for your business you will be in a good position to keep your accounting fees as low as possible.Coconut allocates your costs to tax categories (which you can change if needed). Capturing the receipt or invoice as you go to provide evidence of the cost is essential too. You can bet that in months to come you’ll not remember what the item was and won’t be able to answer a question about it. Having the receipt there will refresh your memory allowing you to immediately answer any queries from your accountant or HMRC.Keeping all business transactions (income and costs) separate from your personal costs and income makes it so much easier to keep on top of your accounting. It means that you, or your accountant, don’t need to wade through lots of transactions making the whole process of producing your tax return or accounts or much simpler.
Here are some tips
With or without Coconut, here are some simple tips for keeping your accountancy fees as low as possible.
- Put all of your business related costs and income through your business current account and try and avoid mixing personal with business (if you’re using Coconut you can categorise transactions as personal for any that slip through the net).
- Try and capture any supporting material like receipts and invoices as you go and keep all your records up to date so that you avoid a mad rush at the end of the year (tools like Coconut really help with this).
- Only claim for costs which are exclusively for business and if in doubt why not ask an accountant or friend with experience so you can learn the rules as you go.
- Put aside the money for your year end tax bill - a simple rule of thumb is 20% of income.
- Try and register with HMRC when you start out as it can sometimes take a while to get up and running and this is a major cause of late fines.
And finally, in most cases accounting can be very simple and managed yourself at the start with a little bit of prep. As long as you stick to everything above, you can hold off getting an accountant for a while and when you do you will keep accounting costs low and avoid a mad rush.Elaine Clark runs cheapaccounting.co.uk, Coconut’s accounting partner. If you’d like to chat to an accountant for a free consultation, you can fill out this form and an accounting specialist will get back to you straight away.