accounting tips for new business1. Be quick off the line

Anyone can be audited – it doesn’t matter whether you’re a huge company with global offices and hundreds of employees, or just one person operating out of a dorm room.

You need to be prepared for this from day one. As soon as you set up your business, start keeping a record of all your costs and sales – this might even include costs you incurred before setting up.

This is not only best tax practice, it’s best business practice, because any expenses you have can be deducted from your profits to reduce tax liabilities.

2. Get in the habit

Let’s face it, accounting is never going to be the most interesting part of your week. With lots of other pressing and more interesting stuff to do, it’s easy to procrastinate, or just forget to do it entirely.

Set an alarm on your phone for a certain time each week, reminding you to do your books – and stick to it. This way you’ll get into a good habit for keeping up to speed.

Remember, as soon as you let your accounts get out of hand a backlog begins to form that could deteriorate into a massive, and potentially very expensive, headache.

3. Keep track

There are tons of deadlines in an accounting period and missing one can land you with a large fine from our friends at HMRC.

Keep on top of your tax dates by using a free calendar service and make sure you set up plenty of reminders.

4. Go back to school

Accounting isn’t only about recording your cashflow. There are various ways to analyse your incomes and outgoings to optimise your business prospects.

Hiring a professional accountant is obviously the most convenient way of doing this, but as a new business you may not have the money to throw at such a luxury.

Thankfully, there’s a lot of support both online and in local business communities. Get meeting people, attend free workshops and see what you can learn from others.

HMRC even offer free webinars to help you understand your tax situation. Click here to find out more.

5. Stay on budget

Although you may have made a profit, some of this belongs to HMRC. Make sure you budget for this as you go, so you won’t get a shock when it comes to pay your tax bill.

Consider opening a deposit or business savings account and put money aside for paying tax. Saving 25-30% of all income you receive will put you in good shape for paying your bills through the year.

6. Consider the cloud

It’s totally possible to keep on top of your accounts using free or non-specialised software alone, but there are lots of choices out there now to take your accounting to the cloud.

These options are a lot cheaper than traditional accountants, so you might find that you can stretch to fit your budget.

It’s an emerging marketplace with lots of interesting options, so take a good look round for the option that suits your business the best. Some companies offer apps that make it easy to do your accounts on the go. Others bundle their software with on-demand accounting advice.

Nick Chowdrey is a business and technology writer. He contributes to a number of online business blogs and is technical writer at online accounting firm, Crunch. (http://www.crunch.co.uk)