Small Business Accounting Specialists

Small Business & Self Employed Accounting

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Read our free guides, request a call back or choose one of our accounting packages to help kickstart and operate your business.

We provide specialist accounting services to freelancers, sole traders, contractors and small businesses in the UK.

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Freelancer Accounting

From £25 per month

As a freelancer you are also classified as self-employed. You do pieces of work for various commercial organisations rather than giving all your time to a single organisation. Generally, you don't provide services to domestic consumer customers.

The most common freelancer roles include web development & design, teaching & tutoring, writing & copywriting, creative & graphic design, admin support & assistance, language translation, web research, transcription, photography, customer service support and social media coordination.

Freelancer Accounting

Sole Trader Accounting

From £25 per month

As a sole trader you run your own business as an individual and you are effectively self-employed.

Example sole trader businesses include electricians, gardeners, private taxi drivers, decorators and plasterers who are all traditional trade and easy for a skilled tradesperson to operate.

They will mainly generate work from word-of-mouth marketing and provide direct services to domestic consumer customers.

Sole Trader Accounting

Contractor Accounting

From £65 per month

As a contractor you typically work for one or two business clients at a time. You provide a service or complete a project on a contract basis. Contract stipulations, including the rate you charge are agreed before you start. Contractors generally work at their client’s premises and complete the work within an agreed time frame, although contract periods are often extended to meet project demands.

Contractor roles cover areas of expertise including finance, legal, banking, human resources, engineering, information technology, sales & marketing, operations and client services.

Contractor Accounting

Small Business Accounting

From £50 per month

As a SME business (small to medium enterprise) you are privately owned, employ less than 100 members of staff (although this typically indicates you’re a ‘small’ rather than ‘medium’ sized business) and provide products and/or services to a range of different commercial or consumer customers.

Most SME business have a limited company structure, but some are established via a limited liability partnership.

Whichever category your work falls into, you essentially work for yourself or employ other people to deliver your services. You therefore have to take responsibility for your finances, which includes preparing accounts and various tax calculations such as VAT, corporation tax, PAYE, national insurance contributions and self assessment.

SME Accounting

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When do you need an accountant?

As a small business owner, you’re always on the lookout for ways you can save money. Therefore, deciding whether you need to get an accountant can be a difficult decision—as that’s an additional cost that you’ll incur.

But managing your business financials well is central to your small business success—and that’s something that an accountant can help you out with.

If you’re still on the fence about this, here are questions that can guide you towards making a decision:

  • Do I have sufficient accounting knowledge and abilities? 40 percent of small business owners find that financial management is the most challenging part of running a business. So if you find yourself struggling with accounting concepts and bookkeeping systems, bringing in an accountant may be your best option.
  • Do I have time to do my own accounting? As your company grows, you may find that you’re spending increasing amounts of time managing your finances. But are you the best person to do this, and could the time be better spent on scaling your business?
  • Am I facing compliance and tax issues? If you’re faced with complicated sales tax issues, or are up against a HMRC tax investigation, it’s best not to wing it without an accountant.    
  • How much help do I need with my business accounting, and what value can they bring? Do you require a full-time accountant, part-time help or periodic consultations? Will you benefit from having an accountant help out with financial analysis, meeting your tax obligations and data management? Once you’ve identified your requirements, you can then choose an option that best meets your small business needs.
  • Am I in the process of forming my company? During the company formation process, you’ll need to make decisions that can have a long-term impact on your business—such as choosing your legal business structure, conceptualising your business plan and setting up an accounting system. An accountant can provide insightful advice, leaving you better placed to make a well-informed decision.

Selecting an accountant

Here are a few things to keep in mind when you’re selecting an accountant:

  • Look for relevant experience: Seek out an accountant who’s experienced with working with small businesses. It’s a bonus if they’ve worked with businesses who are of a similar business structure, size, revenue and industry. It’s also beneficial if they’ve worked with larger clients, as that is an indication they’ll be able to manage your accounts as your business scales.
  • Ask for recommendations: Your personal network is a valuable source of information. Reach out to friends and family who are small business owners, as well as your connections on social networks like LinkedIn or Facebook.
  • Do your research: There are a few things to look out for when you review a candidate’s LinkedIn profile: their past testimonials, qualifications and experience, as well as their personal connections (keep an eye out for candidates who have a strong personal network). Before you engage an accountant for his or her services, do a background check by asking to speak to businesses they’ve worked with.
  • Ask about their communication processes and reporting frequency: Regular communication is key—you want your accountant to review your finances and offer advice on a regular basis, and not just to provide support during tax season.

When do you need accounting software?

Should you stick with your current accounting practices—or is it time to implement a new way of handling your accounting? Here are the signs that indicate it’s time to make the switch to accounting software:

  • Your business is growing
  • You need faster access to information
  • You’re spending increasing amounts of time on manual, repetitive tasks
  • You’re facing an increase in manual errors
  • You lack technical accounting skills
  • You lack a proper accounting system
  • You’re not able to comply with MTD requirements (if applicable)

Accounting terms you need to know

Cash flow: Cash flow refers to the total amount of money that is moving in and out of your business.

Balance sheet: The balance sheet shows how much a business owns (assets), owes (liabilities) and the amount that is left over for its owners (owner’s equity) at a point in time.

Profit & loss (P&L): The P&L is a financial statement that shows how much money your business has made or lost.

Dividends: Dividends are a payment of profit that a limited company distributes to its shareholders. It is the money remaining after all business expenses and liabilities, as well as outstanding taxes (including VAT and Corporation Tax) have been paid off.

Year end accounts:

At the end of a business’ accounting year, limited company directors are required to file the following...

  • With HMRC:
  • Company tax return (CT600)
  • Annual statutory accounts
  • Director’s report
  • With Companies House:
  • Statutory accounts (full, abbreviated or micro)

Director’s loan account (DLA): A DLA is is a record of all transactions between the company and its directors. It records not just the money owed by the directors, but also the money owed to them. At the end of the financial year, the amount is recorded in the balance sheet either as an asset or liability.

Benefits in kind: Benefits in kind are benefits provided to a director or employee that aren't included in their salary or wages. These can be assets or services, such as company cars, private health insurance or non-business travel and entertainment expenses.

Self Assessment: Self Assessment is a tax return form that businesses need to submit to report their annual earnings to HMRC. The term ‘self assessment’ refers to the fact that it’s the individual’s responsibility to work out how much tax they should pay.

Self Assessment payments on account: Payments on account are advance payments for your tax bill that are spread out across the year. You'll need to make two payments each year, and these are due on 31st January and 31st July.

P11D form: The P11D form is a tax form that records employment benefits that the employees and directors of a company have received across the year.

When you need to…

File for VAT

Most businesses need to submit their VAT return quarterly (this applies even if you don't have VAT to pay or reclaim). The deadline for submission is a month and seven days after the end of a VAT period.

File your Self Assessment

Online returns must be filed by 31 January. Paper returns are due earlier, and must be filed by 31 October.

File your company accounts:

As a limited company director, you’re required to file the following:

  • Annual statutory accounts: For your first year of operation, you need to file these accounts within 21 months of your date of incorporation. For subsequent years, these accounts must be filed within nine months of your Accounting Reference Date (ARD).
  • Company Tax Return (CT600): This should be submitted 12 months after your accounting year-end.

Unlike limited company directors, sole traders aren’t required to file accounts with a public body.

Pay yourself:

As a sole trader, you don’t take a salary in the traditional sense; instead, you’ll pay yourself through sole trader drawings from your business.

If you’re a limited company director, you may pay yourself through taking a salary, dividends and pension contributions. Dividends may be distributed at any time or frequency across the year, as long as there is sufficient profit in your company.

Advanced accounting

Improve your cash flow

‘Cash is king’ is an adage that holds true—particularly when it comes to small business finances. Even profitable companies are faced with the threat of closure, if negative cash flow becomes a regular occurrence.

Keeping a firm grip on your cash flow is key, and we’ve outlined a few tips you can implement:

  • Stay on top of your accounts receivable: Late payment is a common problem faced by all businesses, but small business owners can be the hardest hit. It’s critical to stay on top of your accounts receivable, so that you’re better able to minimise delays in receiving your payments. Steps you can take include following invoicing best practices, structuring your payments by milestones and requesting for deposits if you’re fulfilling large orders.  
  • Optimise your accounts payable: Keep your cash flow healthy by maximising the potential of your accounts payable. Steps you can take include building positive vendor and supplier relationships (this is key to improving problems like late payments), as well as taking full advantage of payment terms.
  • Keep a close watch over your cash flow: Blaine Bertsch, CEO of financial forecasting tool Dryrun advises small business owners to update their cash flow projections “every time something happens in their business that affects their cash flow”.
  • Avoid expanding too rapidly: Small business owners should guard against overly quick growth, as this can create pressure on their cash flow. Business owner Tim Berry shares about his experience on Entrepreneur.com, where his business experienced doubled sales and nearly went broke.

Holiday pay

Holiday pay is calculated based on a week's pay. The calculation will vary, depending on the kind of hours an employee works (fixed hours, shift work with fixed hours or no fixed hours) and how they are paid for the hours. We’ve elaborated more on this, as well as payment for overtime and commission in a separate article.

Entrepreneurs’ Relief

Entrepreneurs' Relief is a scheme that reduces the amount of Capital Gains Tax payable when you dispose of (sell) shares in your business. You pay a reduced tax rate of 10%— instead of the usual rates—on the first £10 million of gains. There isn't a limit to the number of times you can claim.

Taxes

We have a wide variety of small business tax advice with guides on allowances and requirements whether you're self employed or running a limited company.

Our knowledge base

Explore our range of resources created by our team of expert accountants and advisors.

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how can we help you?

Whether it's about starting your business, finding accounting support, switching accountant or setting up a Virtual Office, we're here to help.

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NUMBERS TO HELP YOU GROW

Accounting solutions tailored specifically for you and your business

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Accounting services come in all shapes and sizes and businesses often make the wrong decisions. We know from experience that accountancy is so much more than just moving numbers around.

We love working with small businesses, helping you and your team to grow revenues and profits sustainably. We’ll support you throughout, making sure you enjoy the journey by focusing on the aspects of your business (and personal life!) that really matter.

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Free company formation

All you need

Everything you need from your accountant, including management accounting, statutory annual accounts, tax planning and support every step of the way.

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Remove the stress

HMRC liaison, VAT filing, payroll, pension enrolment and director’s personal tax, all covered. We take care of everything, so you can focus on the important stuff!

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Accelerate your business

Your personal accounting specialist will help you grow your business to new heights. Forecasting, dashboard reporting and cash flow visibility to keep you in the driving seat.

Talk to A Specialist

Schedule time to talk to one of our specialist advisors who can walk you through how Forma can help with your business accounting.

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STEPPING STONES
FOR SUCCESS

Stepping stones for small business accounting

OUR SERVICES

Transactional Bookkeeping
Accounts Payable (Creditors) Ledger
Accounts Receivable (Debtors) Ledger
Credit Control (Debtors Management)
Trial Balance
Payroll - Information/Collation
Payroll - Calculation, Payslips and HMRC Submission
Payroll - Process Payments via Bank
P11D Submission
Director's Dividend Calculations (Monthly/Quarterly)
Staff Expense Accounting & Settlement
Business Credit Card Accounting
VAT Returns
Confirmation Statements
Other HMRC Liaison
Intrastat Submissions
Business Banking Administration & Management
Stock Inventory Control
Fixed Asset Register
Monthly Management Accounts (Profit & Loss Account, Balance Sheet, Cash Flow)
Rolling Financial Forecasting
Finance/Lender Covenant Reporting
Annual Audit
Statutory Annual Accounts Preparation & Submission
Corporation Tax Computation & Submission
Self Assessment Tax Returns (x2 Directors)
General Business Review & Advice (Monthly/Quarterly)
R&D Tax Computation & Submission
Additional Non-Trading Business Entity Accounts
What Others Say About Us

Client Testimonials

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Book a convenient time for us to call you and discuss our bespoke small business accounting services further.

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how can we help you?

Whether it's about starting your business, finding accounting support, switching accountant or setting up a Virtual Office, we're here to help.

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Use our free software with any of our packages

Forma free Small Business accounting software

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Our accounting software is used by more than 30,000 businesses in the UK. With automatic bank feeds to save time on bookkeeping, easy to generate invoices and a mobile app - it’s never been simpler to manage your accounting. It’s also free with any accounting package.

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Key Features:

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Automatic Bank Feeds

Directly link your business bank accounts so all your transactions are automatically logged in our software.

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Stripe Feed

Currently we are the only accounting software in the UK that uses Stripe as an automatic feed - perfect for those taking payments online.

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Generate Quotes & Invoices

Easily create and send quotes and invoices, bulk email invoices to multiple customers, and send payment reminders.

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Mobile App

Do everything in your mobile app from uploading receipts easily, checking your finances or creating quotes.

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Tax Overviews

See a clear picture of how much tax you owe and switch easily between invoice and cash based accounting.

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Reports & Deadlines

See a snapshot of how your business is operating and get reminders of upcoming deadlines.

Automate your bookkeeping

Banking Features

We aim to elimate your bookkeeping as much as possible by providing automatic bank feeds so you don't have to manually import your transactions. For online sellers, we make it easy to set up templates for your online stores.

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Easily create invoices and quotes

Quotes & Invoicing Features

Generate quotes and invoices with your company branding in seconds. You can even create and send them through your mobile app.

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Simplify operating your business

Accounting Tools

We have a range of accounting tools and features which make it easy to manage your receipts, project management and snapshot reports to make sure you know your financial position and tax requirements.

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Multi user and mobile user accounts

Account Management

We make it easy to manage your account on the move with our mobile accounting app and you can provide access for other company directors or employees to help manage your finances.

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Start and Grow Your business today

Choose one of our packages that includes free accounting software, a dedicated accountant, free company formation, virtual services and partner bank accounts and insurance options.

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What Others Say About Us

Client Testimonials

how can we help you?

Whether it's about starting your business, finding accounting support, switching accountant or setting up a Virtual Office, we're here to help.

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Register your company for free with any of our bundles

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If you're registering your business you'll need a range of additional support such as a business bank account, business insurance and an accountant to keep your company documents and filing up to date.

We provide a range of unique bundles and packages for contractors and limited companies registering their business in the UK and provide your company registration for free.

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FROM PRE-REVENUE TO ACQUISITION, WE HELP WITH IT ALL

Limited Company &
Small business packages

For any Limited Company or Small Business operating in the UK, we can help get your business up and running and adjust your requirements as your business grows. From pension contributions, monthly payroll or pro-active reviews, we've got you covered.

Our Small Business Packages scale according to your revenue. For every incremental £25k in revenue our pricing increases by 0.1% of your revenue - £25.

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SCALE YOUR CONSULTING & CONTRACTING BUSINESS

Contractor Packages

If you're about to start contracting or have already started contracting then we can help you run your business admin efficiently.

For new contractors, we aim to get you setup within 24 hours with a registered company, bank account, insurance, accounting services and software that you can use to start invoicing your customers.

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