Business Structure, Banking and Bookkeeping

Structures

Common options (names vary by country):

Many people start as sole traders and form a company when income or risk grows. An accountant can tell you when the tax and liability benefits outweigh the extra admin where you live.

Registration and permits

Register the business name if required, get any tax registration numbers, and check whether your city or country needs licences for your activity.

Separate your money

Open a dedicated business bank account from day one. Mixing personal and business money makes bookkeeping painful and can weaken liability protection for companies.

Bookkeeping habits

• Use accounting software (for example Xero, QuickBooks, FreeAgent, Wave) connected to your business bank.
• Categorise transactions weekly; it takes minutes when done regularly.
• Keep receipts (photos are usually fine) for every expense.
• Track invoices and chase late payments promptly.

Set money aside for tax

Self-employed people usually pay tax themselves rather than through payroll. A common habit is moving a fixed percentage of every payment into a separate tax savings account; your accountant can suggest the right percentage for your situation. Missing tax deadlines brings penalties.

Insurance

Consider professional indemnity / errors and omissions insurance (covers claims that your work caused a client loss) and general liability. Some clients require proof of insurance in contracts.

Exercise

Write a one-page business admin plan: chosen structure (with the reason), bank account, accounting software, a weekly bookkeeping routine, a tax savings percentage confirmed with an accountant, and insurance needs.

Check yourself

• What is the main difference between a sole trader and a limited company?
• Why open a separate business bank account?
• Why save for tax as you go?