​Small business banking 101: Tips for success

If you aren’t confident with your accounting, then business banking is likely to be the most neglected part of your business. We all like to see the money piling in, but there are additional steps you can take to safeguard your business during the slower periods.

Small business banking can feel overwhelming at times. With so many options to choose from, many business owners go with their first choice rather than shopping around. Here are my tips for making sure your business banking works smoothly in your first year in business and beyond.

Open a separate business account

If you’re a sole trader, it might be tempting to run all of your business accounts through your personal account. But once tax season comes around, you’ll appreciate having the separation. Open a business bank account as soon as you start running your business so that you don’t have to worry about switching bank details on your invoices further down the line.

Use invoicing software

The simplest way to get paid on time is to use professional invoicing software. Quickbooks and Zero are two of the most popular choices. Another advantage of using professional invoicing software is that it will enable you to scale your business with ease. If you decide to start working with an accountant further down the line, you’ll have the option to share access with your invoicing software and they will have everything they need to get started.

Make the most of customer service

A lot of business owners don’t know just how helpful their business bank account provider can be. When you make the switch from personal to business banking, you can expect an upgrade in customer service. If you’re banking with a high street bank, make an appointment with their business division to find out more about what they can do to support your new venture.

Work with an accountant

It might feel premature to bring an accountant on board from the very beginning, but it could save you a lot of time, money and stress if you outsource this from day one. If you aren’t confident with numbers and don’t have the time or desire to learn more about business accounting, you’ll be making your life much easier if you simply outsource this from the start. You’ll also have the benefit of their expertise to help you run your business more efficiently. 

Save 20% of all invoices

Every time an invoice lands in your account, take 20% of the value and place this in a tax savings account. You might not use all of this, but it helps to have set aside a large chunk to be able to pay your tax bill at the end of January. 

And remember that you’ll also have to cover your “payments on account” after your first year of running a business. This means you will have to pay 50% of your bill for the next tax year’s projected earnings. This often catches the newly self-employed off guard. When you’re saving at least 20% of your invoices, you know you’ll have a good amount set aside to manage this payment.

Looking for more advice and support running your business? Get in touch today to arrange your consultation!