Bookkeeping: What to do first
Why bookkeeping is important and how to go about it
One of the most daunting things about giving up full-time employment to start your own business is the prospect of looking after the company accounts. For an ex-employee who is used to having his or her tax and National Insurance contributions deducted at source via PAYE (Pay As You Earn), the prospect of dealing with the vast, looming shadow that is HM Revenue & Customs can be quite frightening.
It’s tempting to say that there’s no need to worry and that the entire bookkeeping process is child’s play, but that wouldn’t be strictly true. If it were, accountants wouldn’t be paid so well. But the HMRC is not – unless provoked – a bullying, authoritarian organisation. On the contrary, its aim is to help businesses to manage their accounts as effectively as possible. To this end the organisation publishes regular newsletters and leaflets giving tips and guidance on bookkeeping and have teams of advisors on hand to help out over the ‘phone should you run into difficulties.
Bookkeeping – What to do first
Before you even launch your own business, talk to the local offices of HMRC. Call them, make an appointment, explain the details of your business plan and ask them exactly what you need to do. They’ll provide you with advice, relevant leaflets and a selection of forms – such as VAT registration – that you should complete before beginning trading.
This is important. If you start off with all the necessary information it will make the bookkeeping process much easier. It also helps to have a contact within the local offices that you can call whenever you run into any difficulties.