5 self-employed bookkeeping tips

Bookkeeping is a necessary and often tedious part of running a business. 

Recording different expenses, receipts, and invoices for every transaction is time-consuming and complicated. And silly mistakes can cause all sorts of problems further down the line. 

To save time and reduce bookkeeping mistakes for small businesses, there are some simple tips business owners can use to make their lives a whole lot easier. 

The 5 tips we’ll be talking about are:

1. Have a separate business account
2. Records business expenses and capital allowances
3. Organise your invoices and receipts
4. Hire an accountant
5. Use accounting software, like Countingup

This is not a crash course in expert bookkeeping or an all-encompassing strategic guide. As a self-employed business owner, these are just simple things that you can do to improve your basic bookkeeping skills. 

Bookkeeping is tricky enough already without having your personal transactions mixed in with your business. 

It might seem convenient at first, but using your personal account for business will lead to problems in a number of cases, for example:

• It’ll be much more difficult to record and review your business expenses for taxes.
• You won’t have an accurate idea of your business finances.
• If, for some reason, your business is audited, you’ll have to manually separate your business and personal transactions. 

Instead, open a separate business account. You’ll have a clear picture of your true financial situation without having to figure out the difference between your personal and business transactions. 

A separate business account will also make life a lot easier when you’re submitting your tax return. All your expenses will be in the same place, organised by date and time. 

There are dedicated business current accounts, like Countingup, that come with built-in accounting software to make your bookkeeping easier. More on that later. 

As a business owner, there are a lot of things that you can claim as business expenses and capital allowances when you complete your self-assessment tax return. This means you can deduct their cost from your taxable income, lowering your overall tax bill.

Business expenses are any running costs that are necessary for your business. 

• Office costs – for example, stationery or phone bills
• Travel costs – for example, fuel, parking, train or bus fares
• Clothing expenses – for example, uniforms
• Staff costs – for example, salaries or subcontractor costs
• Things you buy to sell on – for example, stock or raw materials
• Financial costs – for example, insurance or bank charges
• Costs of your business premises – for example, heating, lighting, business rates
• Advertising or marketing – for example, website costs
• Training courses related to your business – for example, refresher courses

Capital allowances are similar, but they’re generally one-off expenses like:

• Equipment
• Machinery
• Business vehicles (like cars, vans, or lorries)

In order to claim these expenses on your tax return, you need to have a detailed record of them, so you must keep exact figures and evidence of the purchases. 

With the Countingup business account, recording expenses is quick and easy.

Countingup is a 2-in-1 app with built-in accounting software and a digital receipt capture tool. Just take a photo of your receipts, and they’ll be automatically categorised into different HMRC approved expense categories. 

When it comes to bookkeeping, organization is key. And one of the most common places people slip up is with invoices and receipts. Frankly, sometimes there are just a lot of them to keep track of. 

If you deal with paper receipts, definitely create some kind of filing system and organise them into relevant categories. 

Alternatively, you could ditch the paper receipts and use Countingup’s business account that comes with receipt capture and custom invoicing tools. Just take a quick snapshot of any receipts and they’ll be stored on the app.

We are commonly asked how do invoices compare to receipts and have now created a useful resource article to explain it further.

When it comes to invoicing, the Countingup up app lets you:

• Create an unlimited number of customised invoices.
• Add a logo to invoice templates.
• Send invoices to customers on the go.
• Receive a notification when an invoice is paid.
• Match a payment to an invoice.
• Duplicate an invoice.
• Change an invoice’s due date.

These features will let you manage the whole invoicing process from your phone, making life easier for you and your clients. 

Of course, a surefire way to improve your bookkeeping is to get some professional help with it. A professional accountant can:

• Prepare your financial records for HMRC or companies house. 
• Give you advice and insights on long term financial projections. 
• Complete your self-assessment tax return on your behalf. 
• Advise you on business expenses and tax regulations. 

If you’re a small business, you probably won’t have the money to hire an accountant full time. But there are plenty of accountants that work on a freelance, case-by-case basis.

If you’re using the Countingup business current account, you can even give your accountant access to your financial data account at any time. So they’ll have all the records they need to help you out, wherever you are. 

The Countingup business current account makes it easy to manage all your financial data in one simple app. The app comes with free built-in accounting software that automates the time-consuming aspects of bookkeeping and taxes, like invoicing, recording expenses, and tax estimates. 

What sets Countingup apart from other accounting software is the live cash flow feature. It gives you accurate, real-time insights into your business’ cash flow, so you’re always in control.  

You can also share your bookkeeping with your accountant instantly without worrying about duplication errors, data lags or inaccuracies. Seamless, simple, and straightforward.

Find out more here.