Free Finance Advice for Small Business

You could have the best idea in the entire world. You could have a product idea that knocks the spots off everyone else in your marketplace. Your could be the next Apple, the next Dyson, or even the next Workspace Group (zing); but if you don’t have a firm hand on your finances, Mr. Osbourne will take more of your money than he’s entitled to.

That’s why Club Workspace invited Emily Coltman and Kevin McCallum to the Club venue at Clerkenwelll Workshops to whip the finances of London’s small-businesses into shape.

On Wednesday 27th January ‘FreeAgent’ came to our place. We were delighted to host an organisation who can boast over 17,000 users in 82 countries. These ‘users’ enjoy the accounting software that FreeAgent provide. Their (extremely) affordable platform allows SME owner-managers to easily understand their financial situation. Users can swiftly update their financial info and view a projection of what they’re due to pay when their return is due.

But more on that later, on with the advice!

Financial Records

Emily explained which records Small Businesses must keep.

She explained that LLPs, Ltd. cos and sole-traders are obliged to keep records of their assets, their liabilities, their income and their stock. These records must be kept for six years. However, what constitutes a record?

A word document, a scanned receipt, an online invoice, a document dropped in the Cloud - they all suffice. In other words, you can keep these records digitally. There is no obligation to keep your six-year-old receipts in a haphazard mountain of shoeboxes, box-files and custard-tins.

It is very much worth mentioning this: HMRC do not give you - as an LLP, an Ltd or a sole-trader - a prescribed method of record-keeping. Ergo, there is no ‘right’ way to store your financial records, though there are a plethora of wrong ways.

A bank-statement does indeed fall into the category of things that are acceptable records. However, Emily offered these extremely wise words of warning: Although a bank statement is an accepted method of ‘proof of transaction’, the Revenue may challenge you.

For instance, if you use your bank statement as proof of a purchase from Tesco, the revenue may require you to prove that this purchase was for business purposes. You know that you popped to Tesco for the entire rainbow’s worth of colour-printer-ink, however the suspicious Rev will assume that you spend all your money on apples, ready-meals and multipack Y-Fronts. The moral of the story is: if you can get hold of ‘better’ proof than a bank statement, use that!

And here’s a clever little way of getting better proof very quickly. Paper receipts get lost, they break, they fly away in the wind and they are ruined by misplaced coffee. Snap a picture of them with your smartphone, use Receipt Bank to ping them over to Free Agent and your record is safely stored.

Don’t deliberately over-complicate things. Keep records of all of your financial doings from ‘Day Minus One’. In other words, don’t wait until you start trading to keep these important records of assets, liabilities, income and stock. Keep records of the costs as soon as you start paying them!

This will make your life easier. Why? Because you’ll be able to claim them as expenses and therefore you’ll pay less tax!

There we go, I hope you’ve enjoyed your record keeping fact-file. Thanks to Free Agent for supplying all of the advice. It was a pleasure to welcome Kevin and Emily to Club Workspace at the Clerkenwell Workshops, don’t leave it too long ‘til next time. Thank you to 90SecondsTV for recording the event on video, this will soon be available on InspiresMe. 

For a play-by-play breakdown of the event - including even more free finance advice - travel over to  the Twittersphere and jump on @clubworkspace, or search the #freefinance tag.

A big thanks to everyone who came long, I hope you enjoyed the space, the drinks, the conversation and the free finance advice!