Bookkeeping for new limited companies: the first 90 days

 

Incorporating a limited company takes a few hours. Running its books properly takes a system, and the first 90 days are when the habits get set. Get these foundations right and everything downstream (VAT returns, payroll, year-end accounts, corporation tax) becomes routine. Get them wrong and you spend year one reconstructing.

Week 1: separate everything

Open a dedicated business bank account before the first transaction. Every pound of company money flows through it; no personal spending, no exceptions. Connect the bank feed to your accounting software (Xero, QuickBooks or Sage) on day one. This single step prevents more bookkeeping pain than any other.

Weeks 2-4: build the capture habit

Every expense needs a receipt, photographed into the accounting app the day it happens. Set up invoice templates with your company number, registered office and VAT number (once registered). Agree payment terms with your first customers and put them on the invoice. The habit matters more than the tool: a phone photo today beats a shoebox in March.

Month 2: the recurring deadlines

Register for corporation tax with HMRC (you should do this within 3 months of starting to trade). If you will employ anyone including yourself on salary, register as an employer for PAYE. Check whether you need to register for VAT now or soon (the 90,000 threshold, or voluntary registration if your customers are VAT-registered). Diary every deadline the day you learn about it.

Month 3: the first review

At 90 days, review: are all bank transactions categorised? Is the debtor list clean? Do you know your profit for the quarter? This is the moment to fix the chart of accounts, sort out any suspense items, and decide whether you are keeping up or need help. Most new directors discover here that bookkeeping takes more time than expected, which is exactly when outsourced bookkeeping pays for itself.

The pattern for year one

The companies that sail through their first year-end are the ones that treated bookkeeping as a weekly 20-minute habit from the start. Providers like Finex Outsourcing, a Global Business Services firm supporting UK small businesses, take that habit off the director's desk entirely: reconciled books, VAT handled, payroll run, and a year-end file that assembles itself.