What every business owner should know, but isn’t always told

You don’t need to be an accountant to care about your books.

But you do need your books to care properly for your business.

Bookkeeping is one of the things that often gets put at the bottom of a business owners to-do list.

There are just so many other things to do, and so little time. Especially when servicing clients and maintaining or growing revenue needs to take precedence.

But it’s also the thing that quietly holds everything else together.

Cashflow, tax, decision-making, and even sleep quality.

The good news? Great bookkeeping isn’t complicated.
It’s about good habits, values, and consistent execution, not perfection.

Once you know the top ten practices that make a difference, you can have a more confident and calmer relationship with your finances.

Let’s start with the big picture. We’ll then move into the 10 practices we recommend to every small business owner who wants to run a sustainable and profitable company, whilst also sleeping better at night.

Why Bookkeeping Matters (Even If You’re Not Doing It Yourself)

Bookkeeping isn’t just data entry. It’s decision support.

Messy, inaccurate, missing or inconsistent records mean:

• You don’t really know how the business is doing
• You make decisions based on guesswork
• You may miss tax savings or filing deadlines
• You risk fines, penalties, or cashflow issues
• You cannot see the What, Why, When, How, and Who behind each transaction
• You can’t easily access documents when needed (E.g. If you have an audit, take on a loan or investor, or have a HMRC enquiry)

On the other hand, clean, up-to-date books mean:

• You can track profitability with confidence
• You spot problems earlier
• You plan better and sleep better
• You save time and money when it counts (especially during tax season or investment pitches)
• You know where all your money is going and who is responsible
• You can access documents almost quicker than they are requested!

Think of it like building a house. A solid financial home.

You wouldn’t guess where to pour the foundations, or have bricks missing from the wall. Your books are the same, they’re the foundation for every smart financial move that’s ever made.

If you don’t have them, you can’t make those moves.

The Top 10 Bookkeeping Best Practices for Your Small Business

Whether you manage your books in-house, have a bookkeeper, or use software, these habits will help. If you’re not doing all ten right now, don’t panic. Start with one and build out from there.

1. Separate Your Business and Personal Finances

If we had a pound for every time we saw a small business owner using their personal account for business expenses….

This is the real reason this is important. Mixing accounts makes it harder to track your numbers, harder to claim tax deductions, and easier to make costly mistakes.

HMRC have a principle they enforce strictly. All business expenses must be “wholly, necessarily, and exclusively” for the purposes of the business. And they don’t give much leeway or favourable interpretation!

An easy solution to take is to open a dedicated business bank account and get a business debit or credit card, even if you’re a sole trader.

Credit cards in particular can offer many perks and benefits, along with preserving cash in your business for longer.

2. Track Income and Expenses in Real-Time

Doing your business admin late and ‘after the fact’ often leaves you perpetually playing catch-up. It’s also highly stressful and increases the likelihood of errors.

You forgot what that £14.82 expense was. Receipts go missing and you spend hours trying to match transactions, and remember what happened.

What you need to know is that real-time tracking means less work later, more accuracy now, and fewer surprises.

Next, use software (like Xero) with automatic bank feeds. Better yet, set a weekly recurring time to review transactions. Friday’s often work well!

3. Save and Store Receipts Digitally

Collect receipts in a big pile? Leave them in your jacket pocket or laptop bag? They’re already half-faded! And if you get audited, HMRC don’t accept “I had it somewhere.” or “I lost it”. Especially for larger purchases or those with a higher probability of personal benefit/dual purpose.

Why shouldn’t this be overlooked?

Because receipts provide evidence for claims. They’re your defence if HMRC ever asks questions.

They are also super useful in helping to understand where your money is going. When you’re analysing your finances, you’ll be thankful to be able to see itemised transaction details and breakdowns, rather than just a bank statement line.

One simplest ways to improve this is to use apps like Dext or Hubdoc to snap and save receipts on the go. Even a well-organised folder in Google Drive is better than a collection of paper.

4. Keep Your Chart of Accounts Simple (and Consistent)

What is a Chart of Accounts? It’s your list of transaction categories: sales, rent, software, travel, and so on.

Too many categories = chaos.

Too few = lack of clarity.

It’s worth doing right because a clear chart helps you analyse spending, understand margins, and see where your money’s going.

The first thing to tackle is to review your categories regularly. Merge any duplicates and work with your accountant to build a chart which best fits your industry and company nuances.

5. Reconcile Your Bank Statements Regularly

Reconciliation means checking that your bookkeeping records match your bank statements, and everything is up to date. It sounds dull. But it’s a high-impact habit, which enhances quality and usefulness.

It can also catch duplicate payments, missing invoices, or even fraud, so isn’t just a basic admin task. It’s the #1 way to build confidence in your numbers.

Build a habit to set a monthly reminder to reconcile (or automate it within your accounting software, if possible). It’s 30 minutes well spent, and your future self will thank you.

6. Understand the Basics of VAT

If you’re VAT registered, bookkeeping gets more technical (and important). Unfortunately, ignorance is also not a defence if HMRC come knocking.

“Oh really? I didn’t know. I’m so sorry” doesn’t hold sway, as there are many other important factors that HMRC will consider. It pays off later to do it right first time, and not find yourself in this position.

VAT errors can also be costly, as can missed reclaim opportunities. But getting it right can actually boost your cashflow.

One thing you’ll thank yourself for is keeping digital records with scans of all receipts attached to every transaction.

This saves a lot of time in the event of an enquiry, because you can just give HMRC access to your finance system to self-serve information, rather than having to find historic items yourself, or pay an accountant to sort out the mess for you.

7. Send Invoices Promptly

Cashflow problems are usually collections problems in disguise.

The sooner you invoice, the sooner you’re paid.

The more you follow up, the more seriously people take you. It may seem rude, but it’s also directness and honesty, which can hold many benefits in your business life.

The easiest way to improve this, whilst also avoiding unnecessary friction, is to use templates and automation to send invoices quickly. You can also schedule polite reminders, which make it easy for customers to pay, without creating barriers.

8. Keep Payroll and Staff Records Accurate

If you’ve got employees or contractors, payroll adds another layer of complexity. HMRC expects accuracy and timeliness. So do your staff.

HMRC require you to file Real Time Information (RTI’s) “on or before the pay day”. Your staff expect to be paid correctly, on the same date each month, as stipulated in their contract.

The cost of ignoring payroll errors can also lead to fines or unhappy employees. Neither is good.

Start strong by using a dedicated payroll software or HR system, or work with a provider who’ll do it right and flag issues before they become problems. (We do both.)

9. Review Your Numbers Monthly (Even If You Hate Numbers)

Many business owners avoid this step because they think they need to be ‘good with numbers’.

You don’t. You just need to ask simple questions, and stay curious. Every insight is downstream of curiosity and questioning.

By doing a monthly review you can highlight trends, both good and bad. But most importantly, you can take action. You can use the trends to make adjustments before problems grow.

Keeping records of the reviews can also build your own confidence in your numbers, as well as demonstrating it to other parties who may be interested (E.g. Banks, investors, buyers etc.).

Create a one-page summary: income, expenses, profit, and cash. Track changes. Celebrate progress. Ask your accountant for a template if needed.

At RedBrick we provide a comprehensive, multi-page management report every month to our clients as part of their package.

10. Work With an Accountant Who Actually Helps

Some accountants just tick boxes. Others help you build something better.

You won’t know what you don’t know, and you won’t know what good looks like, so it’s important to analyse providers, meet several, and look for markers of quality like accreditation with a Chartered body such as the Institute of Chartered Accountants in England and Wales.

An accountant who understands your business, your values, and your goals can make your books work harder for you. That’s the difference between compliance and clarity.

Find someone who listens first, explains clearly, and sees themselves as part of your team, not just another external contractor or supplier.

Good Bookkeeping = A Better Home for Your Business

Bookkeeping isn’t glamorous. But it is essential.

The businesses that take it seriously, without overcomplicating it, tend to be the ones that grow in both confidence and profitability.

If your current bookkeeping setup feels more like a shed than a well-built home, we’d love to help!

Whether you’re looking for a fresh start with a new provider, better systems, or just someone to run a few ideas past, we’re here.

For a better home for your business finances, email: hello@redbrickaccounting.com