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Your First-Year Finance Checklist: A Start-Up's Guide to Success
Getting your finances right in your first year can be the difference between surviving and thriving.
At NEXA Accounting, we specialise in helping start-up's lay strong financial foundations, giving entrepreneurs the clarity and confidence to focus on what they do best: growing their business.
Your first year will be filled with opportunities, challenges and crucial decisions. This checklist is designed to help you stay organised, avoid costly mistakes, and set your business up for long-term success.
Choose the Right Business Structure
Why it matters
The way you structure your business (sole trader, partnership, limited company) affects your taxes, liabilities and legal obligations.
Action steps:
- Speak to an accountant to understand the pros and cons of each structure.
- Register your business properly with the relevant authorities.
Set up a Business Bank Account
Why it matters
Separating personal and business finances makes bookkeeping easier, protects you legally and helps build business credibility.
Where clients request additional work outside of the original brief, it can drain profits if not controlled.
Action steps:
- Open a dedicated business bank account early.
- Choose an account that suits your needs - low fees, integrations, online access etc.
Create a Financial Plan and Budget
Why it matters
Without a clear financial road map, it's easy to overspend or run into cash flow issues.
Action steps:
- Prepare a basic budget covering revenue targets and expected expenses.
- Build a cash flow forecast for the first 12 months.
- Identify key financial milestones such as a revenue goal, or break even point.
Understand Your Tax and Compliance Obligations
Why it matters
Missing a tax deadline or filing incorrect information can result in fines and penalties that hurt your start-up early on.
Action steps:
- Make a calendar of filing all deadlines for the first 12 months.
- Calculate a % or monthly £ value to set aside each month for tax obligations.
- Consider the following most common taxes:
- Self Assessment
- Corporation Tax
- Value Added Tax (VAT)
- Payroll Tax (PAYE)
- Construction Industry Scheme (CIS)
Implement a Bookkeeping System
Why it matters
Accurate, organised financial records are crucial for understanding performance and staying compliant.
Action steps:
- Choose simple, scalable accounting software - we recommend QuickBooks Online or Xero
- Connect your business bank account to your accounting software.
- Record all income and expenses day one (include items paid out of your own pocket - it's money owed back to you).
- Reconcile your bank account regularly. We recommend at least once a week.
Monitor Cash Flow Closely
Why it matters
Most start-ups fail because of cash flow issues, not because of being non-profitable.
Action steps:
- Track money come in and out weekly or monthly.
- Invoice client promptly and chase late payments quickly. We recommend automating credit control.
- Build an emergency cash reserve if possible.
- Update your cash flow forecast with actual results to keep on avoid unexpected cash short falls.
Review Your Financial Results Regularly
Why it matters
Financial review isn't just an annual task. Regular check-ins help you spot issues early and make better decisions.
Action steps:
- Set monthly or quarterly financial review meetings (even if it's just by yourself).
- Review your actual performance vs budget and review large variances.
- Update your forecast for actual results and updates on future expected transactions.
- Review your KPI actual results vs targets and investigate any variances.
How NEXA Accounting Supports Start-Ups
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Tailored advice on business structures and compliance
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Help setting up a bookkeeping system
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Ongoing support with tax compliance and cash flow management
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Financial insights to support your start-up's growth strategy
Your First Year Matters - Make it Count!
Get the financial support your need from day one.
Contact NEXA Accounting today and take the first step toward a stronger start-up journey.
If you would like a PDF version of this document, please drop us an email and we will be happy to send you a copy.