5 financial things to set up when you start a company

Starting a company is exciting, you’ve got the name, the logo, the website… and then someone mentions Finances and suddenly you're wondering if you should have just stayed in bed. The good news? Getting your finances organised from the beginning doesn't have to be complicated.

Here are 5 financial things I'd set up as soon as you start a company.

1. A business bank account

First things first: keep your business money separate from your personal money. It makes your bookkeeping easier, makes it much clearer what's happening in the business and saves you from scrolling through your personal bank statement trying to remember whether that £47.99 was a business expense or your latest Amazon purchase. A separate business account isn't just about being organised, it gives you a much clearer picture of your business finances.

2. A tax savings account

This is one of my favourites, don't wait until your tax bill arrives to find the money. As the business makes money, move an appropriate amount into a separate savings account. That way, when Tax is due, you aren't suddenly staring at your bank balance thinking: “Oh. I was planning to spend that.” The exact amount you need to put aside will depend on your circumstances, so get advice on what your tax position is likely to look like. But getting into the habit from day one? Absolutely worth it.

3. Accounting software

Please don't start your company with a spreadsheet called: Accounts FINAL v3 REALLY FINAL.xlsx I've seen enough. Good accounting software can connect to your bank, record income and expenses, store your financial information and make keeping your books up to date much easier. I use and recommend Xero for many of my clients, but the important thing is choosing software that works for your business and actually using it properly, because the fanciest software in the world won't help if you ignore it for six months.

4. A way to capture your receipts

This is very easy to put off until six months later, when you're staring at a chaotic pile of receipts. Set up a digital process from the start, whether that's through your Xero app or a dedicated capture tool. When you work with us on our Core Bookkeeping Package, we connect these digital tools for you so your receipts are logged automatically without you having to chase paperwork.

5. A bookkeeping routine

And finally… actually do the bookkeeping. You don't necessarily need to spend hours every week doing it, but you do need a routine:

• Keep your transactions reconciled.

• Keep your receipts attached.

• Keep your invoices recorded.

• Keep an eye on what's coming in and going out.

Because bookkeeping isn't just something you do because your accountant wants it done, it's how you know what's actually happening in your business. If you don't have the time or energy to maintain this routine yourself, delegating it to a fixed-fee bookkeeper ensures it gets done accurately in the background while you focus on growing your business.

Bonus tip: give your money a job

If you want to take this one step further, consider having separate accounts or pots for different purposes.

For example:

• Day-to-day business: Money coming in and normal business expenses.

• Tax: Money you've already mentally handed over to HMRC.

• Buffer: For those months when things are a little quieter.

• Profit: Money you're deliberately keeping in the business.
  

You don't have to do all of this on day one, but the earlier you start treating your business money intentionally, the easier it becomes.

The biggest mistake?

Thinking you'll sort it all out later, later turns into three months, three months turns into a year's worth of transactions, and suddenly your bookkeeper is asking you what a £16.73 transaction from February was, don't be that person, set things up properly from the start.

Your future self, and your bookkeeper, will thank you.

Need help setting up your new business accounts?

Whether you need a hand setting up Xero or want to hand over your daily admin entirely, check out our fixed-fee bookkeeping packages or book a free discovery call to chat through your setup.

Lauren Flack