5 Essential Bookkeeping Tips for UK Small Businesses
- Prontibooks
- Feb 6
- 3 min read
5 Essential Bookkeeping Tips Every UK Small Business Should Know
Introduction
Bookkeeping may not be the most exciting part of running a business, but it’s one of the most important. Keeping accurate financial records ensures you stay compliant with HMRC, avoid unnecessary fines, and have a clear understanding of your business’s performance.
At ProntiBooks, we help small businesses and startups across the UK manage their books with ease. Here are five essential bookkeeping tips to keep your finances in order.
1. Keep Business and Personal Finances Separate
Mixing personal and business finances is one of the biggest mistakes new business owners make. It can lead to confusion, tax issues, and unnecessary admin work.
✅ Open a business bank account to keep transactions separate.
✅ Use a business credit card for company expenses.
✅ Track business income and outgoings properly for tax deductions.
Pro Tip: Many UK banks offer free business accounts for startups—shop around for the best deals!
2. Stay on Top of Invoicing & Payments
Late payments can cause serious cash flow problems. In the UK, businesses are legally entitled to charge interest on overdue invoices, but prevention is always better than cure.
✔ Send invoices on time and include clear payment terms.
✔ Use cloud accounting software like Xero or QuickBooks to automate invoicing.
✔ Chase overdue payments with polite but firm reminders.
Pro Tip: The UK’s Prompt Payment Code encourages big businesses to pay SMEs faster—check if your clients are signatories!
3. Keep a Record of Every Expense
Even small expenses add up and can reduce your tax bill. HMRC requires businesses to keep records of all income and expenses for at least six years, so staying organised is key.
✅ Keep digital copies of receipts and invoices.
✅ Track mileage and travel expenses.
✅ Use apps like Dext to scan receipts straight into your accounting software.
Pro Tip: Many business expenses—such as office supplies, software, and travel—are tax-deductible, so don’t miss out!
4. Reconcile Your Bank Statements Regularly
Reconciling your bank account means checking that every transaction in your accounts matches your bank statements. This helps spot errors, duplicate payments, or even fraud.
✔ Schedule monthly reconciliations (or more often for busy businesses).
✔ Use accounting software that connects directly to your bank.
✔ Double-check transactions for any unexpected charges.
Pro Tip: Set up a separate tax savings account and transfer a portion of revenue each month to avoid surprises when your tax bill is due.
5. Get Ready for Tax Season Early
UK businesses need to file accounts and tax returns with HMRC and (if applicable) Companies House. Staying ahead of deadlines avoids last-minute stress.
✔ Know your filing deadlines (Self Assessment, VAT, Corporation Tax, etc.).
✔ Keep digital records in line with Making Tax Digital (MTD) requirements.
✔ Work with a bookkeeper to ensure everything is accurate and compliant.
Pro Tip: If you're VAT registered, consider using cash accounting to improve cash flow—this means you only pay VAT on invoices once they’ve been paid.
Final Thoughts – Let ProntiBooks Handle Your Bookkeeping!
Bookkeeping doesn’t have to be a headache. By staying organised and following these simple steps, you’ll keep your business finances under control and avoid any nasty surprises from HMRC.
Need a hand with bookkeeping and payroll? ProntiBooks is here to help!
📩 Email: info@prontibooks.com
🌍 Visit us at: www.prontibooks.com