Running a small business comes with a long to-do list and managing your finances is one of the most important – and often most overlooked – parts of the job. Whether you’re a solo contractor, retailer, freelancer, or service provider, good accounting practices are the backbone of a sustainable business. Poor financial management is one of the top reasons small businesses fail, but the good news is that you don’t need to be an accountant to stay on top of things. 

Here are five actionable accounting tips every small business owner should follow to keep their finances clean, compliant, and stress-free for the new tax year.

New Tax Year Tips

1. Separate Business and Personal Finances 

Why it matters: Mixing business and personal expenses makes bookkeeping confusing, causes tax headaches, and can even hurt you legally if your business is ever audited or faces liability. 

How to do it: 

• Open a separate business bank account and use it strictly for business-related income and expenses 

• You could consider applying for a business credit or debit card to track expenses easily 

• Keep a clean paper trail for every business transaction – receipts, bank statements, mileage logs, etc 

• If you ever pay for business expenses from your personal account (or vice versa), make sure to record it so that you can then reimburse yourself down the line 

Pro Tip: Some accounting software allows you to link bank accounts and categorise transactions in real-time, making this process much easier. 

2. Stay on Top of Your Bookkeeping Weekly 

Why it matters: Waiting until tax time to sort through a year’s worth of receipts and transactions is a recipe for missed deductions, errors, and stress. Regular bookkeeping gives you a clear financial picture year-round. 

How to do it: 

• Set aside a regular time each week to review and record transactions, reconcile your accounts, and send or follow up on invoices 

• Use tools like QuickBooks, Wave, Xero, or FreeAgent to automate and organise your financial data 

• Log all income, categorize expenses, and update your records frequently 

• Try to keep track of income, expenditure and cash flow so you’re always in the know about where you stand with your finances 

Pro Tip: Make use of receipt apps or software to snap photos and store your receipts digitally for easy access. 

At Caroola, we partner with FreeAgent – a fantastic cloud-based software that allows you to bookkeep on the go and always have your information accessible and handy! 

3. Understand Your Tax Obligations 

Why it matters: As a small business owner, taxes are your responsibility as there’s no employer automatically deducting them for you. Mismanaging taxes can lead to penalties, interest, and sometimes even enquiries from HMRC. Here’s a few tips of how you can try and keep on top of your financial affairs: 

• Set aside a percentage of your income in a separate savings account to use for taxes when the time comes 

• Track deductible expenses year-round – these can include home office costs, mileage, equipment, software, and even part of your phone bill 

• Consider working with a tax professional to ensure your company tax returns and financial accounts are accurate and you’re claiming all relief and allowable expenses available to you 

Pro Tip: Use a tax calendar or app to track deadlines for estimated payments, sales tax filing, and year-end reports.

4. Monitor Cash Flow Closely 

Why it matters: Profit is not the same as cash. A business can be profitable on paper but still run out of money if cash flow isn’t managed carefully. Our advice would be to: 

• Track incoming and outgoing cash on a monthly basis 

• Use cash flow projection tools to forecast the next 3 to 6 months to help you identify potential shortfalls early 

• Send invoices promptly and follow up with late-paying clients. Consider charging late fees or offering early payment discounts 

• Delay large purchases until you’re confident about your cash cushion, especially during slow seasons 

• Always be cautious about using monies that are earmarked for things such as tax payments 

Pro Tip: Some accounting software includes a cash flow dashboard that visualizes your money-in/money-out patterns automatically. 

5. Work with a Professional  

Why it matters: Even if you do your own bookkeeping, a second set of eyes – especially from a certified accountant – can help you catch errors, optimise deductions, and ensure you’re in compliance with tax laws. 

Not only that, but accountants will be able to advise you on any available deductions and allowable expenses to make use of, as well as helping you review your books which in turn allow you to make considered financial decisions about the future of your business. An accountant can also review your current strategy to see if it’s the most efficient one for you to have in place. 

Having a business plan of action – whether that be a long-term or short-term strategy – is always a fantastic idea so that you have a way of mapping your goals alongside financial targets. 

Pro Tip: If your income is unpredictable or growing quickly, you may find it useful to lean on an accountant and request regular check-ins and reviews. 

Final Thoughts 

Good accounting isn’t just about taxes; it’s about knowing where your money is, where it’s going, and how to make smarter business decisions. Whatever your business, getting a handle on your finances early will reduce stress, prevent costly mistakes, and give you the confidence to grow your business sustainably. 

Start small: automate what you can, review your numbers regularly, and don’t be afraid to ask for help. You don’t have to do everything, but you do need to stay informed. 

Get in touch 

Have more questions? We’re always here to help! Get in touch with our expert team today.