14 April 2026 · 6 min read · Bruce Thomas
None of these are exotic. They are ordinary habits that quietly increase the cost of your accounts, distort your figures and occasionally attract HMRC's attention.
1. One bank account for everything
Mixing personal and business spending makes reconstruction inevitable and expensive. A separate business account is the single highest-value change most small businesses can make.
2. Leaving the bank unreconciled
Unreconciled accounts mean duplicated or missing transactions. If the balance in the software does not match the statement, nothing derived from it can be relied on.
3. No receipts to support purchases
A bank line proves money left the account, not what it bought. Receipt capture apps solve this in seconds per transaction and take the shoebox out of the equation.
4. Treating asset purchases as expenses
A van or a machine is not a repair. Coding capital items to expenses distorts profit and can cause allowances to be claimed incorrectly.
5. Ignoring the suspense account
Anything parked because nobody knew where it went will still be there at year end, and will be charged for at year-end rates.
6. Not recording director or owner drawings properly
Money taken out has to be classified — salary, dividend or loan. Left unallocated, it usually ends up as an overdrawn loan account and a tax charge.
7. Ignoring aged debtors
An invoice not chased at 30 days is materially less likely to be paid at 90. Review the aged debtor list every single month.
8. Applying VAT inconsistently
Zero-rated, exempt and outside-the-scope items are all different. Reverse charge in construction changes it again. Errors compound across quarters.
9. Doing it once a quarter
Batch-processing three months of paperwork the week before a VAT deadline guarantees mistakes. Twenty minutes weekly beats a lost weekend quarterly.
10. Keeping no backup or audit trail
Cloud software with an intact audit trail is now expected. Records must be kept for six years, and a laptop is not a record-keeping system.
This article is general guidance for business owners in the UK and does not amount to advice for your particular circumstances. Tax rules change and the right answer depends on your figures — please take specific advice before acting.
