You finally have your own business. You have a great idea, you work hard, your clients love you and you're growing fast. You're also busy, busy, busy and the last thing you want to think about is the accounting.

BUT you have to. Accounting is as much a business essential as managing your inventory or servicing your customers. With good accounting practices you will not only get an ongoing audit of your business and a reliable tool to measure your success, but also a powerful framework for future planning.

There are three key accountancy areas that are easily overlooked but that any company of any size – and especially SMEs – should pay special attention to.

1. Keeping records and receipts

You must keep a record of all transactions, no matter how small. This needs discipline because without this record you may miss out on VAT rebates, which would have a direct impact on your bottom line. Worse, you might underestimate and understate your income which– even if it's an honest mistake - could lead to a fine. Not only will good record keeping help you manage your outgoings, it will also make sure you're paid on time by your customers. In all businesses cash is king. You may have the most profitable business in your field but if you have no money in the bank then you can't pay your bills and your business will fail. So it's worth making sure you keep all your receipts (for a minimum of six years under HMRC rules) and chase your customers for payment.

2. Meeting deadlines and completing statutory paperwork

Every business will have a minimum of two annual deadlines:-

• Submitting your corporation tax return
• Paying any tax due as a result of your tax return calculation

Then, depending on the size of your company and its status, you will also have to do the following:-

• A quarterly VAT return (the current income threshold is £85,000)
• A monthly Payroll RTI (Real Time Information) return for each employee*
• Annual company accounts (for HMRC and Companies House)*

*Applies to limited companies only

Again, a decent accountancy software package will help you keep track of the numbers needed for each of these submissions, plus a qualified accountant can help you complete your annual company accounts.

3. Company admin

You cannot treat your company like your own personal cash machine. You will need to know how to take money out of the business legally, either via the payroll or dividends or a combination of the two. Any dividend payout must be voted for by your Board of Directors, minuted, and accounted for within the company profits (i.e. liable for corporation tax) so that money should not be seen by you as free cash. Also, should you go overdrawn on your Directors Loan Account it means you owe your company money. This will show up on your balance sheet in your annual accounts and will attract a tax liability.

Orlando Accountant Fajardo And Associates can help