Week in, week out, we turn up in your inbox on a Friday morning offering you friendly advice on things you ought to do to be a successful, shining example of self-employedness. What we rarely do is give you guidance on what to avoid. So, this week, we sat down with My Accountant Friend main man, Iain Morrison, to find out his top tips on what not to do when freelancing or accounting.
1. Don’t assume you’re suddenly rich
An unusually large amount of people who have recently set up their own business seem confused by the nature of their new bank account. Remember, your business account is not for buying the weekly groceries or clothes for going out. Pay your personal account from your business account, leave your business credit cards at home, and then you can go on a spree. If you’re not sure how much to pay yourself, ask an accountant.
2. Don’t lose your self-discipline
Sorry to sound school masterly, but if you have trouble with overspending then running your own business is going to be problematic. As an accountant, I can only advise you when you’re spending too much. You’d be surprised (or maybe you wouldn’t) by the amount of times I’ve seen a client spend their corporation or personal tax, only to turn deathly pale when HMRC comes calling. Put money aside every month in preparation. Be disciplined, or lock it away and give someone else the keys!
3. Don’t forget the bookkeeping
Get into the habit of recording all of your expenses. It may seem like a faff dealing with all of those bits of finicky paper, but it’s a faff worth attending to as you could be paying over the odds on your corporation tax. If you’re looking for a useful tool to help you with your receipts, the My Accountant Friend package comes with an app that reads your receipts and does the annoying bits for you. Check out our video below.
4. Don’t miss your deadlines
If the idea of getting a knock on the door from HMRC fills you with dread, one of the best ways to avoid attracting their attention is to get things done on time. Our clients at My Accountant Friend get a helping hand on this front, as they get a friendly email from their personal accountant every time a deadline looms. And if that doesn’t help, we’ll give you a few extra nudges to make sure you’re still alive…
5. Don’t forget the big one
If there’s one D-day you simply can’t afford to miss, it’s the Confirmation Statement deadline. The Confirmation Statement (also known, ominously, as Form CS01) is required each year to keep Companies House informed of your business’s situation – whether you have new directors, new structures, etc. Should you miss this, your company can be dissolved with all the funds in the bank. That means you get none, with everything going to HMRC. Take it from me, not many people get through that without a very bitter taste in the back of their mouth.
6. Don’t stick your head in the sand
OK, so it may sound obvious, but communication is key. As your accountants, we will do all we can to keep you informed, to make sure you know about all of your deadlines, to help you work through your tax bills, brown envelopes and paperwork. But we can’t do any of that if you don’t keep us informed.
You can pick up the phone or drop us an email anytime you like. That’s just one of the benefits of using My Accountant Friend over other online accountants – you’ll always get through to the same dedicated person who knows the financial side of your business inside out. No waiting in queues and no ticketing systems.
As Bob Hoskins used to say, it’s good to talk.