DLS Partners

So you've taken the plunge and decided to start your own business?  Here are our Top 3 Tips for sole traders and companies to make life easier....

1.  Open a dedicated business bank account and get a business credit card if possible.

By having a dedicated business bank account you'll make your own life a lot easier as all business income and most business expenses will now be in the one place and your own personal finances will be kept separately.  If you are planning on doing your own taxes this will greatly ease the headache of preparing your own tax return and if you are going to use an accountant, having your business affairs organised in this way should result in significantly lower fees.

A business credit card is also a great idea and should be used instead of cash for all business expenses where possible.  Not only does this help to centralise your business expenses but it helps to ensure you get a tax deduction for everything you pay for.  It's important to keep the actual receipts for the items you pay for and these should be stapled to the credit card statement for when you need to prepare your accounts.

2.  If you're registering for VAT consider whether or not you qualify for the Cash Receipts basis.

Normally people and companies registering for VAT do so on an invoice basis and this essentially means that the VAT is due to Revenue for the VAT period in which the invoice is dated regardless of whether or not you have actually been paid for that invoice.  This can cause big cashflow problems as you can be expected to pay VAT over to Revenue that you haven't yet received.

The alternative is the cash receipts basis on which you pay VAT over to Revenue in the period in which you received payment of the invoice, regardless of when the invoice was issued.  This is obviously a lot more beneficial to small businesses as Revenue only get the VAT when you have been paid.

The current annual turnover limit for the cash receipts basis is €635,000 and it is also available to businesses where over 90% of their turnover is from unregistered entities.

3.  Learn to use the Revenue Online Service (ROS) and get your book keeping in order from the start

When you start your business your first focus, and rightly so, is generating income.  However, you'll probably end up costing yourself a lot of money in the long run if you don't keep up with your book keeping on a regular basis.  You can do as much or as little as you want to yourself and you can involve an accountant to do anything you're not comfortable with.  Most accountants are willing to offer advice consultations to start up businesses for a nominal fee and should be available at the end of a phone if you run into any difficulties after that.

At a minimum, start up files for your sales invoices, purchases invoices, bank and credit card statements.  Keep a listing of your sales invoices and detail what dates the payment for each invoice was received and lodged.

Also, the Revenue Online Service (ROS) is excellent and very user friendly.  You should register on www.ros.ie and this will give you access to all details of your taxes including what payments you've made, what returns are due and when.  You can also file a lot of your returns and make tax payments online using ROS and this should make the whole process a lot easier.  

If you're running your business through a Limited Company see our next blog on our Top 3 Tips for Starting a Company.........