3 reasons to switch up your business accounting this April by FreeAgent image

3 reasons to switch up your business accounting this April by FreeAgent

Is your current accounting system not cutting it? Then it’s time to switch it up.

Posted byFreeAgent
onMonday, 1 April 2024

New (tax) year, new you?

If cumbersome spreadsheets or your current accounting software aren’t quite cutting it, April happens to be the best month of the year for certain business types to try a new accounting system. Here’s why - and how - you can give your finances a fresh start this spring.

1. The new tax and financial years begin in April

A new accounting year is the point when you’ve finalised your business accounts from the previous 12-month period and you’re starting fresh for the year ahead.

If your business is a limited company and 1st April is the start of your business’s new accounting year - which means it also aligns with the financial year - then 1st April is the perfect time to start using new accounting software to give yourself a simpler and cleaner start (more on this shortly). 

If you don’t already, an added benefit of aligning your accounting year with the financial year is that you’ll only need to calculate Corporation Tax based on one set of rates. This is because the start of the financial year is when any new Corporation Tax rates and rules typically come into effect. If your current accounting year dates are different, but that sounds like it might be a good fit for your business, you can look into changing your accounting year end date with HMRC. 

If you operate your business as a sole trader, partnership, or if you’re renting out properties as an unincorporated landlord, and your accounting year aligns with 6th April - the start of the new tax or ‘fiscal’ year - then that can be a logical time to make the move to new accounting software. 

If you’re an employer, 6th April may also be a convenient time to start using new software as it marks the start of a new payroll year.

Need a little refresher on which of the different ‘years’ apply to you? Here’s a helpful explanation of the financial, accounting, tax and fiscal years

2. A new accounting year = a fresh start

At the start of a new accounting year, the information you need to enter into a new accounting system is much easier to collect than if you chose to make the switch at other times in the year. This is because you’ll already be adding up a lot of the key numbers anyway when you prepare your accounts. The information you’ll need to put into your new accounting system typically includes:

  • your accounting dates (including your business start date i.e. the date your business started trading if your business is a sole trade or partnership)

  • how much your business owned and owed as at the end of the previous accounting year (how much cash you had in the bank, what your customers owed you, what you owed to your suppliers etc.)

  • your VAT registration number, if you’re VAT-registered. If you’re midway through a VAT quarter in April, you’ll also need to provide a few additional details to make sure your VAT return comes out with the correct numbers.

3. FreeAgent is the freshest start of all ✨

FreeAgent’s award-winning accounting software is designed to take a weight off your mind with a whole host of smart, intuitive features. FreeAgent can help you:

Check out the three simple steps you can take to switch to FreeAgent or start your 30-day free trial today and enjoy a fresh financial start this new tax year.

Originally published 27 March 2022
Last updated 1 April 2024

Disclaimer: The content included in this blog post is based on our understanding of tax law at the time of publication. It may be subject to change and may not be applicable to your circumstances, so should not be relied upon. You are responsible for complying with tax law and should seek independent advice if you require further information about the content included in this blog post. If you don't have an accountant, take a look at our directory to find a FreeAgent Practice Partner based in your local area.

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