Originally written by Alice Feilden on Small Business
Small business accounting can be daunting. But, this handy guide will help in getting your small business accounting right from the very beginning.
Step one: Know what’s required
It’s important to keep financial records from the very beginning of a business, no matter how incidental the expenses or how rudimentary the system. Companies based in the UK must be listed on Companies House and businesses must be registered with HMRC. Make sure to organise a financial record-keeping system too, which is legally required, and set up a business bank account. This will allow your business to take out a loan, use a business credit card and take card and online payments from clients.
Step two: Understand bookkeeping and accounting
Small business bookkeeping and small company accounting are often confused with one another or taken to mean the same thing. But they’re not! Bookkeeping is the process of recording and reporting company finances and acts as a small but crucial part of basic business accounting.
By extension, accounting is the process of analysing and examining financial information to create a business strategy, establish forecasts and make decisions.
As a small business, it’s worth first getting to grips with the fundamentals