Let’s face it, no one enjoys scrambling through receipts or chasing down missing invoices the week before the tax deadline. But staying organised throughout the year isn’t just for the overly cautious. It’s a practical strategy that can save time, reduce stress, and help you avoid any unwelcome tax surprises.
Our recommendation is to follow 7 simple steps that financially organised business owners follow to stay tax-ready all year. Whether you’re a sole trader or managing a small team, these tips will help keep your accounts tidy and your accountant happy.
- Keep business and personal finances separate
It sounds simple, but it’s one of the most common mistakes new business owners make. Mixing personal and business transactions creates confusion and can be a red flag if you’re ever audited.
What to do:
- Open a dedicated business bank account and credit card.
- Avoid using business funds for personal spending (and vice versa).
- Use accounting software that makes categorising transactions easy.
Why it matters:
Separating your finances makes bookkeeping easier and helps you clearly see what your business is really costing and earning.
- Track expenses as you go
Waiting until the end of the month (or year) to sort out your expenses? That’s a recipe for missed deductions and forgotten receipts.
How to stay on top of it:
- Use tools like QuickBooks, Xero, or ClearBooks to track spending.
- Snap a photo of receipts as soon as you get them.
- Set aside 10 minutes a week to review and capture transactions.
The result:
You’ll have a clear and accurate record ready when it is needed.
- Schedule monthly finance check-ins
Think of this like a regular health check for your business. You don’t need to be an expert, just get familiar with your numbers.
What to review:
- Cash flow (what’s coming in and what’s going out)
- Any overdue invoices or upcoming bills
- Actual spend compared with the budget
- Anything that looks unusual or needs a second look
Bonus tip:
Use this time to estimate your tax payments so you’re never caught off guard.
- Set aside tax money as you earn
Tax bills shouldn’t be a surprise. If you’re self-employed or don’t have taxes withheld automatically, it’s important to set money aside regularly.
How much?
A good rule of thumb is to save 25 to 30% of your net income but check with your accountant for a percentage that fits your situation.
Make it easier:
Use a separate savings account just for taxes so you’re not tempted to dip into it.
- Keep your records up to date
Good bookkeeping is the foundation of a well-run business. When your accounts are current, your tax filing becomes a breeze.
Your options:
- Use accounting software like Xero, QuickBooks, or Clear Books to do it yourself.
- Consider hiring a bookkeeper if you’re too busy to manage it properly.
Why it matters:
Clean records help you avoid mistakes, claim all your deductions, and make better decisions throughout the year.
- Speak to your accountant before year end
Don’t wait until tax season to get advice. A quick meeting before the end of the financial year can help you make smart moves while there’s still time.
What you can do:
- Make final adjustments for deductions
- Top up retirement contributions
- Review and update your estimated taxes
- Plan for major purchases or investments
Think of your accountant
Use them as a financial guide, not just someone who files your return.
- Use tools that work for you
There are plenty of apps and platforms out there but only you know what fits your workflow. The best system is the one you’ll actually use.
Look for tools that help you:
- Stay consistent
- Automate wherever possible
- Make reporting simple
Finally staying tax-ready doesn’t require a background in finance or a stack of spreadsheets. With a few consistent habits and the right tools, you can keep your finances organised and your business on track.
Ultimately when tax season comes, you’ll be prepared and stress free.
If you would like some help, please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk. You can also book a free 20-minute call with Yarka – https://calendly.com/yarka-ssa/20min
