Bookkeeping For Startups

With Hayley Clare

We’re here to give you a run down on bookkeeping for startups.  Starting up a new business can be incredibly rewarding, but of course it can also be challenging.  You have full responsibility over all aspects of your business, from finance to marketing, sales and operations. Just because you have full responsibility doesn’t mean you have to do it all on your own.  With a good bookkeeping service you can reduce the difficulty of managing your finances.  From your day-to-day finances,  to self assessments at the end of the year.   Along with other elements like HMRC, payroll and insurance, having the right help will stabilise your business in so many ways.

Key areas an bookkeeper can help

  • Self assessment tax returns at the end of the year
  • Payment and registration of VAT
  • Planning for your tax
  • HMRC correspondence and support with paperwork
  • Business plan review
  • Help with your business accounting software
  • Any licensing requirements help
  • Assistance with securing small business loans

Questions to ask an bookkeeper

In order to assess whether a particular bookkeeper is correct for your business, here are a few questions that you need to ask to ensure they are the right fit for you.  Making sure that bookkeeping for startups is something they can deal with, and well.

How do you keep in touch with your clients how quickly will you respond to me if I need help

This is important because in order to keep on top of your finances you will need to be in communication with your bookkeepers on a fairly regular basis. This ensures that all incomings and outgoings are in order and you also have time set aside to be able to review elements on an ongoing basis.  Although these meetings don’t need to be face-to-face you’ll need to ensure that your bookkeeper is accessible quickly either by email or phone call.

Will I deal with lots of people or just one person?

Even if you’re dealing with more than one person it is important that you do have a dedicated person assigned to you.    This is somebody who will know the business and is able to give advice and assess on an ongoing basis.  It also helps to minimise errors and ensures that deadlines are met.  Of course a good personal relationship is helpful moving forward.

How do I know that my deadlines won’t be missed?

Deadlines are so important.  Especially when it comes to things like taxes and HMRC.  It is important to ensure there is no room for error here.
How do we organise things at the start regarding paperwork?
Different companies use different processes for onboarding clients however there are a few important things that you need to take into account.

  • Research.  How much have they done on your company?
  • What do they know about you and how can they help?
  • How organised are they?
  • Do they have a clear plan going forward after your initial meeting?  They should have a plan on what happens next.  This should include clear instructions on what is required from you in order for them to move forward.  Additionally, they should outline the important deadlines and what is required to meet those deadlines.

How much experience do you have, bookkeeping for startups?

This is a very important question if you are a start-up.  If you find someone who only deals with larger companies they won’t be able to accurately understand your needs.  A bookkeeper who is geared up for dealing with start-up businesses are better placed to understand the pressures and changes to your financial position.

Can you help me with business growth?

As a start-up you could do with more help than just bookkeeping.  For example, someone who understands how to get external financing or help with business valuations.  As well as help with managing your cash flow and advice about strategies and the business goals.   The bookkeeper works in the very heart of your business on the financial side.  They should also be able to help you with advice on how to grow your business with secured foundations.

What is the pricing structure?

Different providers have different fee structures.  Some require payment up front and long-term contracts.  Others have flexibility and monthly payments, including for bookkeeping for start ups. These are ideal as they help with cash flow.   Additionally, if there is an hourly rate you’ll need to find out how much time is likely to be required on your accounts so that there are no nasty surprises.  It’s also worth finding out if there are any additional billables that you may not know about.

Is there anything else I need to know about?

You might have asked all the questions that you can think of but there are bound to be extra things and insights that your bookkeeper can give you at this point. It’s worth asking them if there is anything else they can add.

Bookkeeping For Startups – Checklist

Having someone to do your books each month may not seem like something you need, however these are just some of the things you’ll need to keep on top of on a monthly basis.
Everything is entered.

  • Have you got all your sales recorded
  • Are your purchase invoices up-to-date
  • Do you have all your receipts
  • Are all your expenses and mileage claims correct
  • Is your petty cash recorded
  • Are all stock adjustments accounted for
These are important so that profit and loss accounts show a true picture of your business.

The Accounts Reconcile.

You need to ensure that all your accounts are reconciled at the end of each month so that income, expenditure and financial accounts are correct.   This needs to be done regularly rather than all in one go.  So that any errors or issues can be dealt with at the time.   Errors found later on in the year can be very difficult to trace and very troublesome when it comes to doing your final paperwork.  The following accounts need to be reconciled.
  • Bank accounts
  • Credit  card accounts
  • PDQ control accounts
  • Sales channel accounts

Have you claimed everything that you possibly can?

Without a bookkeeper you may not know all of the things that you can claim for.  There could be many things that you are paying for that can be justified as business expenses.  Money you can claim back as such, for example business mileage done with your own personal vehicle.

VAT is reconciled and paid for.

VAT submissions must be done and paid on time. Decisions need to be made on whether VAT can or cannot be claimed.  These reports can make a big difference to your business if incorrect.

For example if you don’t have a VAT receipt for an invoice you can’t claim for it. Keeping these things in a shoe box, right through to the year end, and not dealing with it monthly could be very costly for you and your business.

All Cash is accounted for.

It is so very easy to lose track of cash so it’s very important to keep receipts and invoices for everything paid for in cash.  As you can imagine if this is not reconciled on a monthly basis, it would be very difficult to catch up on.    You need to know that you are accounting for it correctly throughout the year as this is where most HMRC inspections tend to focus.  For example if you can’t show that you have spent money in the business you may end up having to have it allocated as personal expenditure.  Just because you couldn’t find the paperwork.

Stock levels are known.

If you’re keeping stock in a business you will need to ensure that accounts are adjusted monthly as appropriate.
The debtors and creditors list is up to date.

Creditors are your suppliers.  These are the people you owe.   They should be checked on a regular basis to keep the list up-to-date.   Additionally you need to deal with any invoices that need paying are done so as appropriate.

Debtors are those that owe you.  This will be the list of invoices currently unpaid to you. This needs to be checked regularly to ensure that the list is up to date and any relevant allocated, written off or paid.   Of course this list is also used to chase payments due to you.

Profit and loss review

Everything in this checklist enables you to produce the profit and loss and balance sheet report which shows the businesses financial position.  You can also look at your profit and loss account compared to the last time it was run to get an ongoing picture of the way your business is going.  This is great to get into the practice of having on a monthly basis.  Errors and omissions can be corrected as well as being able to make important financial decisions for the future of your business. It’s important to have an accurate picture of the shape your business is in, to be able to make changes quickly as appropriate.

All businesses are different and have different requirements, however these are the basic checks that should be done each month to ensure that your business financial position is in good shape.   Of course we are here to help with bookkeeping for startups with the above to take the pressure off, allowing you to get on with what you’re good at. Running your business!

Contact us today for a consultation

Contact us today to discuss how we can help keep your business in good shape, we have lots of experience bookkeeping for startups, helping you to expand with solid foundations.

About the Author

Bookkeeping For Startups with Hayley Clare, published on 27/07/2021.