Just incorporated a company? - 10 practical things to do now!
Congratulations on incorporating your new company. Starting a new business is an exciting time and it's easy to get bogged down with everything that needs to be done.
We've put together our list of 10 practical things that each newly incorporated company should do. We'll be honest, they're not the most exciting & dynamic tasks. But trust us. They'll save you from heartache and a big headache further down the line!
Here we go pop pickers..... in at number 1 is;
1 - Register for a company bank account
Remember a limited company is a separate legal entity and therefore it needs it own bank account. You can't bank business receipts in your own bank account, as you could if you were a sole trader. All bank payments and receipts need to be kept separate from your own personal funds.
It's also a good idea to apply for a company debit card when you open your business bank account. This allows you to easily pay for business expenses directly from the business bank account and keep your personal and business affairs separate.
2 - Register your company's domain
As soon as your company is registered at Companies House, purchase your domain name from an online registration company. You may not be in the position to build your company's website yet, but grab that domain whilst you can. There would be nothing worse than getting six months down the line and realising that your chosen domain has been taken by someone else, especially if you've had business stationery printed with that website address on it.
Domains are relatively cheap to buy, so for the price of a burger and chips you'll have your domain claimed!
3 - Get insurance in place
This is an important one that really can save you from a headache down the line. Most companies need at least Professional Indemnity Insurance, Public Liability and Employers Liability. You'll find that these three insurances are often available to buy together in one package. Be sure to shop around as prices can vary but we've found Policy Bee to be very cost effective. You may not need insurance straight away, but as soon as you purchase stock, start to trade, deal with the public, have visitors to your office or employ staff make sure you have insurance in place.
If you've just incorporated a company that you previous run as sole trader make sure that you've updated all your insurance policies so they are in the name of your new limited company.
4 - Get your bookkeeping in order from day one
Trust us, we've seen and heard the pain of unpicking and recording a huge pile of old crumpled up receipts more times than we care to remember.
Start recording your business transactions from day one. Even if you are starting off really small and very slowly, make a record of everything you spend and receive and keep the receipts. Just a simple list on a spreadsheet is fine. If you follow our tips in this post, you'll being paying for your domain and 1st insurance premium pretty soon, so make sure you get them recorded.
If you're company starts with a bang and you find you making plenty of sales or perhaps your developing a product and purchasing lots of materials, it may be worth subscribing to an online accountancy package such as QuickBooks. Take advantage of their online tutorials, intuitive software and automatic bank feeds and you'll save yourself a lot of time in the long run. It'll also make your first accounting year end a lot easier to handle.
5 - Record and claim mileage correctly
We're kind of following on from the point above, but make sure that you start recording your mileage correctly and from the start. If you've just incorporated your company, chances are that your using your own car for business. For each business mile you drive up to 10,000 p.a. you can claim 45p from your company. If you drive over 10,000 miles per year, then the rate drops to 25p for all miles over 10,000. Use a simple spreadsheet or note book and note down the mileage you are doing, where you started from, where you went to and the miles driven and who you went to see.
For ease you can then submit a mileage claim to your company on a weekly or monthly basis and reimburse yourself the mileage costs due to you.
A word of warning, please do not pay for private fuel for your personal car from your company's bank account. You may become liable to a big taxable benefit in kind. Instead, make sure you always claim mileage as we've mentioned above.
6 - Ensure that your company documents include your registration details
As a limited company you are required by law to show your company registration details on your company documents. This includes letter heads, email footers, invoices and website etc.
You should ensure that these items clearly show your registered address, company number and where the company is registered ; ie 'registered in England'.
7 - Ensure that purchase invoices are addressed to the Limited Company
Where possible, ensure that any invoices issued to the company are addressed to the company rather than your personal name. This is especially important if you are registered for VAT.
Business expenses allowable by HMRC have to be 'wholly and exclusively' for the use of the business. Have the invoice addressed to the company is one step in the right direction to demonstrate this.
Of course getting your travel agent to address it's invoice to your company for your two week, all-inclusive trip to the Maldives, won't wash with HMRC that it's exclusively for the use of the business!
8 - Start saving for tax
Payment of your company's first Corporation Tax bill and payment of your personal Income Tax will seem a long way off if you've just started in business. However it has a nasty habit of creeping up on you. Budget for tax as you go and put the money to one side.
If you're about to set up your company bank account, ask the bank if you can open a business savings account as well and place your tax savings in there and try not to touch them if possible. I appreciate it's a really easy point to make but it's a great habit to get into and will save you sleepless nights in the future as well as late payment interest.
9 - Look at your pension obligations under 'Instant Pension Duties'
Businesses started since 1 October 2017 now have a legal duty to put employees straight into a workplace pension as soon as they employ them.
New employers need to assess whether their new staff are eligible for automatic enrolment and if they meet the criteria, they need to be put into a pension scheme.
However the above doesn't apply to companies that just employ a sole director and have no immediate plans to employ another person. As a sole director employee company you still have to make certain declarations to the pension regulator to confirm this.
The pension regulator website is really helpful and will guide you through your obligations. Follow the link here. Please note that failure to comply with these regulations can result in a financial penalty being issued.
10 - Consider if you need to register with the Information Commissioners Office?
Ignoring data protection obligations can lead to huge fines and (sometimes) personal liability. If you are processing or storing any personal data whatsoever (including any customer or employee email addresses) then you need to register with the Information Commissioners Office. It's cheap and very easy to do. Data protection regulations are about to change, but more details on this, along with the registration form are available on the ICO website here.
I hope you found these suggestions useful. If you want any further information feel free to drop us a line and don't forget to check out our range of small business accountancy packages, that are great value for money!
All that's left to say is good luck with your new business!
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