Accountancy Advice for Start-Ups

WestBIC is an Enterprise Ireland partner providing hands-on startup support, funding readiness and investment preparation for early-stage founders in the west of Ireland.

Starting a business in Ireland can be a daunting task. For one, there are many things to consider from an accounting perspective.We’ve put together some great tips to help make sure your start-up business is on the right track. Read on for some helpful advice!

Get Your Business Registered with the Companies Registration Office
Registering your business with the Companies Registration Office (CRO) is essential in forming a start-up business in Ireland. Establishing your legal identity and registering your business correctly through the Companies Registration Office will provide advantages such as improved access to key services like banking and insurance.

Open a Business Bank Account
Opening a business bank account is also an important step for any small business owner in Ireland. Business banking accounts allow you to keep track of all transactions and costs, enabling you to ensure a healthy cash flow. This will make budgeting much easier and let you secure credit from banks to grow your business even further.

Apply for a Tax Reference Number
All start-up businesses must ensure that their tax affairs are up to date and that their accounts are accurate and in order. This can be done by obtaining and submitting the correct Tax Reference Number to avoid potential penalties. The process is relatively straightforward but complex enough to require the assistance of an accountant or advisor to ensure the best and most efficient outcome for each start-up business in Ireland.

Register for Value Added Tax (VAT)
Value Added Tax (VAT) is a significant part of the standard operating procedure for any business in Ireland. Therefore, every start-up should register for it, as it could be beneficial when dealing with invoices and taxation down the line.

All service type businesses with an expected turnover of €37,500 or higher and all retail type businesses with an expected turnover of €75,000 should register for VAT, with the minimum threshold for registration set at €25,000 of taxable supplies during any consecutive 12-month period across all members of an accounting unit. It’s recommended that businesses register as soon as they go over this minimum threshold to ensure they are compliant and up to date.

Keep Accurate and Up-To-Date Financial Records
Keeping accurate and up-to-date financial records is a crucial task for start-up businesses. Doing this properly helps ensure that all aspects of the company are managed effectively, from basic budgeting to filing taxes on time.

It’s also essential to ensure that proper record keeping occurs because it can be a valuable source of information, highlighting patterns — such as stock consumption trends or irregularities in expenses — that can be helpful in better managing operations.

Don’t Wait Until Year-End to Do Your Accounts
Being on top of your accounts from the start can save you time and money in the long run. Waiting until year-end to attend to your accounting needs can have serious consequences. The further out you are with your accounts, the more difficult it can be to determine which operations need improvement or restructuring.

Ensure You Have a Good Accounting System
The correct accounting system can help facilitate sales, track expenses, and efficiently calculate taxes. Accounts need to be kept up to date to create reliable financial statements and, more importantly, to make well-informed decisions for the growth and longevity of the business.

Understand the Different Types of Taxes That Apply to Businesses in Ireland
Knowing the types of taxes that apply to businesses in Ireland is an essential part of business success. From corporation tax and fuel and vehicle taxes to employment taxes, each has a unique effect on the financial stability of a start-up business. So, understanding these various tax types is imperative in ensuring profitability.

Know your key dates from an income tax point of view

Example: Sole Trader business registered for tax from 01/03/23
1. 01/03/2023 Register for Income Tax

2. 31/10/23 Pay Preliminary Tax e.g. €500

3. 31/12/23 Tax year ends

4. 31/01/2024 Bring records to Accountant

5. 31/03/2024 Accountant should have calculation for tax for 2023 complete, e.g. tax bill €2000

6. 31/10/2024 Pay balance for last year 2023 — €1,500 (€2,000 — €500 already paid preliminary)

7. 31/10/2024 Pay preliminary tax for 2024 €2000 being 100% of last years bill 2023 to avoid penalties.

8. Pay any balance remaining for last years tax, note; preliminary tax is a payment for the current year’s taxes.