To ensure we can offer you the best possible advice, it's important for you to handle your bookkeeping regularly. We recommend updating your records on a daily/weekly basis, but at the very least, please do so monthly. This helps us provide accurate and timely guidance based on the most current information.
If bookkeeping falls behind, it becomes challenging for us to support you effectively. To keep on top of things, we recommend setting a reminder in your diary.
General bookkeeping Advice
You need to attach receipts to expenses in the software. If its a physical receipt, I would suggest downloading the bookkeeping software app and taking a picture with your tablet or phone.
Try not to pay personal expenses through the business, but if you do (it happens!) please write 'Personal' in the description and post it to your director loan account. You will then need to repay the money from your personal account to the business account and post the money received in the company bank account to your director loan account too.
Add a description to the expense if it isn’t obvious what the expense is for (e.g. description: “business entertainment - meal with Tom Smith, our main supplier”).
Do not pay personal tax from your company bank account. If you need money to pay your personal tax bill, pay out a dividend from your business to your personal account and pay the personal tax from your personal account.
Speak to us BEFORE incurring any expenses that are out of the ordinary and may not be claimable as a business expense.
Categorise expenses as accurately as you can. If you don’t know where to categorise an expense to, post it to “sundry expenses” and write a detailed description of what the expense was for.
VAT registered Businesses
If claiming VAT, please attach a valid VAT receipt. A VAT receipt has a 9 digit UK VAT number on it (e.g. 123456789 OR GB123456789). You will have to supply valid VAT receipts for any VAT you have claimed, if you are investigated by HMRC.
Don’t claim VAT on business entertainment.
If you do your own VAT returns, add a reoccurring entry in your diary so you don’t forget to submit it.
I would suggest setting up a direct debit through your business government gateway account so the VAT is paid automatically a few days after the VAT deadline date.
Use the correct VAT rate for different goods and services: tax rates.
FreeAgent
Money Paid to User
Dividends: Money Paid to User > Name > Dividend
Take-home pay on payslip: Money Paid to User > Name > Net Salary and Bonuses
Expense Reimbursement: Money Paid to User > Name > Expense Payment
Pension
Pension paid directly to pension company that doesn’t touch your payslip: Payment > Auto > Pension
Pension deducted from payslip: Other Money Out > Pension Creditor
Taxes
PAYE: Payment > Auto > PAYE/NI
VAT: Payment > Auto > VAT
Corporation Tax: Payment > Auto > Corporation Tax