A construction company requires careful financial management, just like any other business. In particular, a construction company will need to keep an eye on things like their invoices and expenses. Doing so can be tricky since you’ll need to deal with clients and manage your bookkeeping simultaneously. A good way to make things easier is to use a business account to help with financial management.

This article will show you what to look for in a business account, so you can pick the best one for your construction company. We’ll look at a variety of topics, including:

  • How can a business account help my construction business?
  • What should I look for in a business account?
  • What’s the easiest way to sign up for a business account?

How can a business account help your construction company?

Tax 

The amount of taxes you pay and the system you’ll use depends on how you register your business — that is, whether it’s a sole trader or a limited company. Paying the correct amount of tax is hugely important, as the government can charge you with tax evasion for intentionally paying less tax than you should. Tax evasion charges can lead to punishments like an unlimited fine and up to seven years in prison.  

On top of that, paying taxes can be very complex. One of the trickiest parts of paying tax is claiming back any business expenses. You pay money to HMRC for any profit you make, but you can reduce your tax bill by claiming purchases as business expenses. This means you’ll only pay tax on the profit you made and not on the cost of purchases necessary to run the business. 

For a construction business, these expenses could be things like building materials, tools, or fuel to run vehicles. You’ll have quite a few expenses if your construction business gets a lot of work since you’ll likely need to buy new materials for every new client. This is costly, but the advantage is that you can use those purchases to reduce your tax bill.

Without a business account, this can all get a bit confusing. Business accounts like  Countingup help simplify things, as you can view and record your expenses easily when they’re all in one place. Countingup is especially helpful, as you can do all this with its easy-to-use app.

A particularly handy feature is Countingup’s automatic expense tracking, which further helps with paying taxes. This feature will organise your expenses into similar categories to the ones you’ll get on HMRC tax forms, so filling in the forms is as simple as copying the information across.

Keep your personal finances separate

You might find it tempting to use your personal bank account for business, as it can seem like a simpler option. While it might save a little time, the downsides aren’t worth it: if you don’t keep your business and personal money separate, your financial records can rapidly become disorganised. This isn’t ideal since having organised records is a big part of running your business effectively.

There are a few drawbacks to setting up a business account: it’s usually a quick and easy process, and it will help you save time and money. Since your transaction history and financial information will be much easier to see and analyse, it can also help you make better financial decisions.

What should I look for in a business account?

A really good business account shouldn’t just act like any bank account; it should have a range of additional features and software that makes running your business easier. We’ll look at a couple of the most helpful features for a construction company. 

Invoicing on the go

The best business account should also offer a way of making invoicing easy. Invoicing clients is the primary method for receiving payment for many construction companies, so having an easy way to create and send invoices is vital.

With the Countingup app, you can create an unlimited number of invoices for free. In addition, you can customise them according to your needs — for instance, you can change the due date for payment — and even add your company logo for a more polished-looking document.

Countingup’s system is a great way to avoid common invoice mistakes, as you can duplicate invoices that you know are accurate. Since a mistake can mean your business loses out on money, having a way of ensuring accurate invoices is essential.

Receiving payments is easier with Countingup, too. You’ll receive a notification when a customer pays their invoice, and you can match payments to invoices by selecting the payment on the balance screen. This invoice matching tool helps keep your records organised and helps confirm that clients are sending you the correct amounts. 

MTD-friendly

The best business account should be MTD-compatible, as this feature is essential if you’re going to calculate and pay your taxes correctly. MTD stands for Making Tax Digital, a government project to make HMRC more modern by encouraging the use of modern technology. For small businesses, this will mean some big changes in the next few years.

In April 2022, VAT-registered businesses with a taxable turnover of less than £85,000 will need to submit their VAT return per MTD guidelines. Then in 2024, self-employed individuals and landlords making over £10,000 from businesses or properties will need to follow MTD rules when filing their income tax self-assessment.

These rules mean you’ll need to use software that is MTD-compatible when filing tax forms to HMRC. Since Countingup is MTD compatible, it’s fine to use it for any tax-related tasks. Eventually, all businesses will need to follow MTD rules, so it’s smart to download and use accounting software before you get left behind.

What’s the easiest way to sign up for a business account?

If you own a construction company, you’ll have a lot to manage and maintain, so your time will be incredibly valuable. When looking for a business account for your company, your priority will likely be an account that saves time and allows you to focus on construction rather than bookkeeping.

Countingup is an ideal solution. Not only is it a two-in-one business current account with built-in accounting software, it’s also easy to sign up. Simply download the app and follow a few simple steps.

Thousands of business owners use Countingup to make their accounting more straightforward. If you’re interested in a Countingup business account for your construction company, click here to start your three-month free trial today.

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