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Accounting Tips for a Successful Startup Business

Accounting Tips for a Successful Startup Business

4 [Essential] Accounting Tips for a Successful Start-Up Business.


If you’re in the process of setting up or have just set up your new business, you will know how tough it can be. Tough, but incredibly rewarding.

At the startup stage of any business, you wear ALL the hats. Even ones you didn’t know about! Sales, marketing, accounting, bookkeeping, cleaning, IT, admin, customer service, business development… The list goes on. 

One area that needs close and scrutinous attention, is your business finances. All of the great ideas in the world can’t keep a new business afloat if you run out of money. If your primary area of expertise is not in accounting or bookkeeping, then take a look at these accounting tips for startups below: 


Accounting Tips for a Successful Startup:


Leverage Finance Solutions

One of the biggest hurdles for a small business, especially when trying to gather momentum, is cashflow. However, you can actually avoid potential startup burnout. Don’t skip paying employees, or yourself, because you don’t have the money in the bank. You should also not put off major growth opportunities because you need to have the money first. Discover financing options – so you don’t have to wait on incoming cash. 


Use Accounting Software

This is still overlooked by some businesses as unnecessary, with the business owner preferring to work from a spreadsheet. However, the time saved, accuracy, decision making data available completely outweigh the comfortable spreadsheet. 

Using a cloud-based accounting software programme such as Xero, will enable you to have a good, accurate handle on where you stand financially at all times from anywhere in the world (with wifi).

Startup owners carry the weight of their businesses on their shoulders and though there is a lot to keep an eye on, financial health is absolutely fundamental to your business success. Using smart accounting tactics will help you navigate the tricky ground in the early days of your business with ease and reliability.


Create Different Bank Accounts

Just like your granny used to do with different pots of money for different events, sent up several bank accounts so that you can keep track of your outgoings. Operating expenses, tax, owners pay and profit. Each pot is then allocated a different percentage of your total income.

Financial analysts suggest having at least 3 months’ operating expenses but we suggest if you can build it up to 6-months you will have a firm buffer should anything happen.


Hand it over!

As you will presumably be the technician in your business, trying to learn another trade quickly and competently is time-consuming and will end up eating into your time selling.  Working with a good, reliable bookkeeping or accountant is worth its weight in gold.  Accounting and business finance experts will save you valuable time, will know tricks and tip for saving you money and will warn you when a potential financial hurdle is approaching.



Which is the best finance solution for my business?

Which is the best finance solution for my business?

You want to grow your business, but how?

Your available operating expenses are taking up in the day-to-day running of the company. You can see a pipeline forming, yet you don’t have the staff to meet the fulfilment of the work that is on the horizon.

Sound familiar?

The team at the Finance Department have recognised that as a small business wanting to grow, cashflow is often the problem. Being able to get enough money in the bank to fund marketing, staff, equipment, office space etc. is a challenge. And when the ‘Oh my goodness I need more staff / a new computer / bigger office’ comes, what do you do?


To help make your business growth journey smoother and easier, we have teamed up with Capitalise to offer you a financing solution that could see your business steam ahead of your competitors.

It can be a minefield trying to find a lender whose experience and lending criteria matches the specific needs of your business. As a trusted partner of Capitalise we can support your business needs by matching up your business financial requirements with specialist lenders within your industry.

Being a Capitalise partner, we have access to over 300 finance lenders so whether you’re looking for additional finance to complete a merger, a new business acquisition, or simply need some working capital to keep your company ticking over, we can help to match you with a specialist lender that meets your cashflow and business needs.

The Finance Department is delighted to be a Capitalise partner offering you a financing solution that can take your business to the next level.

Just a few ways business finance can help:

• If you want to invest in new equipment, but don’t have the funds, asset finance could be a cost-effective way to fund purchases and spread the cost of equipment over its economic life. We have lenders specialising in hire purchase, leasing and refinancing.

• Invoice finance allows you to use your business invoices to get paid up to 95% of their outstanding amount upfront. Payment can be quick with invoice finance – usually in under 24 hours, one approved for the facility.

• A merchant cash advance also offers quick access to capital and is an established alternative to traditional bank loans. You use your credit card transactions to secure funding – and pay back a small percentage when your customers pay with a credit or debit card.

• With trade finance, you use your purchase orders to get funding. Our lenders will fund your suppliers upfront based on confirmed orders and finished goods. Funding can be received in a few business days, once approved for the facility.

• Working capital finance is intended for everyday business costs such as salary payments. Working capital loans are an easy and hassle-free way to secure funding and again, once approved for a working capital loan, funding can be received in just a few business days.

• Property finance has become a staple form of funding that now features in almost every commercial property purchase or redevelopment project. You’ll also have access to rapid bridging loans, development and commercial finance.

For more information about how you can grow your business, please get in touch and we will be happy to help. Not only can the Finance Department help with finding the right financing solution for your business, but we can then complete the plan, budget and forecast for you to really make a difference.



8 Advantages of Outsourcing your Bookkeeping

8 Advantages of Outsourcing your Bookkeeping

Small Business Bookkeeping – When to Outsource?

Running a small business can be [read ‘is’] all consuming. You have to wear so many hats that’s it’s no surprise if [when] something gets missed. Sound familiar? 

But, as the business owner it’s only natural to want to manage everything yourself; marketing, sales, accounts, customer service etc. If you’re in the start-up phase, then I suspect you will definitely be attempting this yourself. However, unless you have been trained or have experience in working in any of these industries, it can not only be time consuming, expensive (ask yourself how much is an hour of your time worth?), but also frustrating and demoralising.

So, the question is: ‘Why should you outsource your bookkeeping? And when should you do it?’


8 Advantages of Outsourcing your Bookkeeping


We’ve put together a list of the 8 main advantages you gain when you choose to outsource your bookkeeping to The Finance Department.

  1. Get up to the minute reports at the touch of a button – AND always be sure that the information is correct
  2. You will discover where money is being made and lost in your business allowing you to adjust your business strategy
  3. Implement a process for credit control and debt chasing – Xero automated invoices can assist with this
  4. Outsourced bookkeeping allows you to keep on top of the books without paying for an in-house salary
  5. You only pay for what you need and use
  6. You submit your VAT returns and company accounts on time
  7. Stop feeling guilty about the bookkeeping being on your ‘to-do’ list and feel confident it’s being taken care of
  8. Expert advice to help grow your business


Our team of bookkeeping and accounting specialists have many years of experience and can come in and take charge of your finance function relieving you, or any managers in your business, from the stress and allow them to concentrate on what they’re best at.



What are the tasks of an accountant?

What are the tasks of an accountant?


Accountants can give you strategic advice and come up with clever ways to save money or boost revenue. They’ll also remove or automate administrative tasks that distract you from your core business. Getting an accountant will help you run your business with more clarity and confidence.



1. Help launch your startup business

Starting a new business can be exciting and terrifying, but it takes more than a good idea. You need to know it will make money – and you may need to convince investors and lenders of the same thing. An accountant can do that for you.

They’ll help test your idea, identify your startup and operating costs, and create credible revenue forecasts. They also know which lenders are playing ball at any one time, so you can approach the right people for finance. Plus they’ll work on your pitch, so you’re ready to impress those lenders.


2. Help with a business strategy for growth

There are so many moving parts in a business. Sometimes it’s hard to know where to focus. Accountants can help you figure out what’s important.

They’ll work with you to set goals – personal, professional and financial – then give you tools to measure your progress. You’ll end up with a set of key performance indicators (KPIs) that tell you how your business is doing.

If you have accounting software (such as Xero), your accountant will set up dashboards that allow you to check your KPIs at any time of the day or night. And if things aren’t going as planned, what does an accountant do then? They’ll help you troubleshoot the issues, test solutions, and reset your KPIs as needed.


3. Fix your cash flow

Many profitable businesses fail because they run out of money at the wrong time and can’t afford to pay suppliers or staff. Even a highly active business won’t last long if payments are slow to come in, or expenditure is too high.

Accountants know that revenue ebbs and flows, and that costs do the same. They’ll help you predict the effect on cashflow and come up with strategies to manage the situation. They’ll organise cash reserves and come up with a spending plan that ensure there’s always money in the bank. It’ll make payday less stressful, supplier relations easier – and sleep deeper.


4. Listen and support you

Being in business is tough. It can be lonely, too. When things seem too hard, and you start thinking about the cozy 9 to 5 you left behind, a top accountant or virtual finance director can keep your head in the game.

They know how much your business means to you. They can reassure and reset you on your journey. And they’ll help you cope with stress by breaking down big business problems into manageable parts. Giving moral support is an important part of what accountants do.


5. Manage your debt

There’s good debt and bad debt. Your accountant can help you tell one from the other. They’ll find the least expensive borrowing strategies for your business – with the right mix of repayment flexibility and low interest. If you need refinancing, they’ll take care of that too.

Accountants will also advise when spare cash should be used to pay back loans, and when it should be reinvested in the business. They’ll do that by considering the numbers behind your business and looking at how your debt’s structured to develop a specific strategy for you. It’s not just blanket advice.


6. Deal with unpaid invoices

Unpaid invoices are a fact of business. Chasing those debtors is a distraction you don’t need, but you can’t afford to ignore the problem. Your accountant can take the headache away.

Xero has a function that can set up and send send automatic invoice reminders to customers when their bill is due and/or overdue.

If invoices remain unpaid after this, your accountant can arrange debt financing – where a business will buy your unpaid invoices from you and chase the payment themselves.


Accounting is a vital service; but how does it differ from bookkeeping? The two services are often compared, but actually they are complementary:

  • Accountants will look at the accounts that have been created, often on a quarterly basis. They will make any minor adjustments required.
  • They will use the information in the accounts to file tax returns and other official reports. They will also provide high level business advisory services.


  • Bookkeepers do the day-to-day work and bring the accounts up to a high standard of detail and accuracy.
  • They can also advise you on issues that might affect you in the near future, such as cashflow problems or late invoice payment.


For your business to run smoothly, ideally you need both people. You’d hire a bookkeeper to look after the day-to-day work. And you’d hire an accountant to handle official reporting and high level business advice.



How to create an invoice – that gets you paid!

How to create an invoice – that gets you paid!

Find out how to create an invoice that will be accepted by your most fussy customers. This guide takes you through the basics of raising an invoice and putting all the right information on it.

The etiquette of raising an invoice

Make sure your customer is expecting your bill. If it comes out of nowhere, they may be slow to approve it, or even annoyed. Explain your process before you supply anything, so they know when to expect your bill. If you don’t have an agreement in place, at least tell them when an invoice is about to be sent.

What information goes on an invoice

Information about you

Your name, address and contact details. Freelancers can use a personal name, otherwise use your business name. You should also quote your company number and, if VAT registered, include those details.

Information about the customer
Add the customer’s name and contact details. If it’s an organisation, confirm their legal name. It could be different from the brand name you’re familiar with.

Details about what was sold
List the products you supplied, their prices, and the quantities of each. Or list services, with professional fees against each.

The cost
Total all your charges, making sure to apply any discounts you’ve offered. Add VAT at the end, if you’re VAT registered.

The customer reference
If your customer has given you a reference or purchase order number, include it. This will increase your chance of being paid promptly.

Instruction on when and how to pay
State when the invoice is due, and be clear if there are late fees (or on-time discounts). Tell them which types of payment you’ll accept and give the information they need to make those payments, such as a bank account number or a link to online payment.


How to create an invoice number

An invoice number can be anything – and can include letters – as long as none of your invoices have the same number. You can simply number them sequentially – INV-001, INV-002, INV-003, and so on.

If you want your invoice number to be more informative, you could:

  • Give each customer a separate code (Vandelay Industries becomes VAN)create a job number for each project (001 for cleaning their sales offices and 002 for cleaning the factory offices, for example) include the invoice date (using the yyyy-mm-dd format will make it easier to group jobs this way).
    So for cleaning the factory offices on January 21, 2018, you’d make an invoice with the number VAN002 – 20180121.

Invoice details – how much is too much?

Always provide a description of the goods or services supplied, so the customer knows what they’re paying for. But don’t add so much detail that it slows down your invoicing process. Here are some guidelines to help you make an invoice that’s straightforward:

  • Use language from your original quote so the customer can see you’re delivering on your promise.
  • Be as concise as possible. You can keep a more detailed record of the work in a private diary, but don’t put it into the invoice unless you’re asked for it.I f a customer requests a lot of detail, add it as an attachment.
  • Keep the invoice itself to one page if you can.

Dont Forget

  • File a copy of the invoice for your tax records.

Luckily Xero does all this for you (and much more) leaving you free
to tackle to day to day running of the business!

Contact us here or call on 01392 495483

Thanks to Xero for their expert tips.


Don’t miss out on your Annual Investment Allowance!

Don’t miss out on your Annual Investment Allowance!

Make the most of your Annual Investment Allowance

Since it was introduced in 2008, the Annual Investment Allowance (AIA) has changed four times and is set to do so again on 1st January 2016 when its current limit of £500,000 will fall to £200,000, meaning the benefits for SMEs will be significantly reduced. Therefore, businesses need to act fast in order to take full advantage of the current Annual Investment Allowance.

What is the Annual Investment Allowance?

The AIA is a type of capital allowance that offers 100% tax relief on eligible plant and machinery up to a set limit for the year of expenditure. In simple terms, it means that businesses can deduct the cost of qualifying expenses from their taxable profits in order to pay less tax. It was introduced to support SMEs by encouraging qualifying capital expenditure in order to increase growth and productivity.

How will the change affect my business?

If your business’s accounting period runs into 2016, your AIA will be calculated on a pro rata basis. For example, if your business’s financial year started 1st April 2015 and ends 31st March 2016, then the first nine months will be subject to the current £500,000 entitlement, making a maximum allowance of £375,000 for the period 1st April 2015 to 31st December 2015. The three month period between 1st January 2016 and 31st March 2016, when the allowance is reduced to £200,000, will be prorated to £50,000. This means that by the end of the financial year in 2016, businesses will have a maximum AIA of £425,000 for that period. However, do take into consideration that only £50,000 will be eligible for the first three months of 2016.

With this in mind, any SMEs that have been looking to invest in qualifying assets are encouraged to expedite any purchases with delivery and payment prior to 31st December 2015 in order to fully benefit from their 2015 AIA entitlement.

Need some advice?  We would be more than happy to chat through your options so give us a call on 01392 927902 or contact us here.