Lionheart Virtual Assistance

15/10/2026

This one is for the limited company directors. If you pay yourself in dividends, here is a detail that catches people out.

A dividend can only be paid out of profit left over after corp tax is calculated. Not turnover, not the balance sitting in the bank, not profit pre-tax but actual profit after your company has met its costs and its tax. If there is no profit, there is no dividend to take, however healthy the bank balance looks on the day.

Each dividend needs a paper trail. A dividend voucher and a record of the decision to pay it.

Also, if there is more than 1 director and they both have a 50/50 split of the business, they both have to take the same amount of dividends. That figure combined still needs to be paid out of the company profit after costs and tax.

Directors, are your dividends proportionate to your profit and properly documented or is it something that happens and gets tidied up later?

13/10/2026

Messy books cost you in ways that stay hidden until they really hurt.

Last week I posted about duplicated bills, but it isn’t just that. It could be tax figures built on numbers that aren't right, decisions made on numbers that aren’t true or hours lost at year-end untangling what could have been caught in an afternoon months earlier. All of it adds up to the stress of never quite trusting your own accounts.

Clean books do the opposite. You know what you owe and what's actually yours. No surprise shocks or questions from your accountant resulting in digging around for an hour to reply. You decide on real numbers instead of a hopeful guess and year-end becomes a formality rather than another dreaded thing.

Read more about this in my blog, link below.

Where does mess creep into your books? That's usually where the cost is hiding too.

https://lionheartva.co.uk/what-messy-books-really-cost-you-and-what-clean-ones-save/

08/10/2026

Here is a bookkeeping choice many sole traders don’t know they have.

When you fill in your tax return, if your self-employment income is over £1,000, you can usually choose to claim your actual business expenses or deduct a flat £1,000 instead. This is called the trading allowance and the best option depends entirely on your own figures.

It is often most useful for people with low costs: consultants, coaches, VAs, designers, anyone whose biggest outgoing is their own time rather than stock, equipment or materials. Often, exactly the people who assume they have nothing worth claiming.

Two things to note: the trading allowance cannot be used in certain situations, such as against income from a company you are connected to and it cannot be used to create or increase a loss.

I am not going to tell you which option applies to you, because that depends on your figures and your circumstances. But it is a five-minute question worth asking your accountant or bookkeeper, like me.

Do you know whether your expenses came in over or under £1,000 last year? It is usually a good starting point for working out which method may best for you.

06/10/2026

The devil really is in the detail.

A new client came to us with duplicated bills sitting in their Xero. Nothing malicious or intentional, just bills that had been entered twice, approved and left waiting to be paid. Then they were spotted to be duplicates and the pre-VAT-return panic kicked in so they contacted us.

It might seem like hassle to go back through the bills tab, especially if you have an auto-forward on out of your inbox for invoices and receipts, like the client did.

But those duplicates weren't harmless clutter, they overstated what the business owed and fed straight into the VAT figures, so the numbers being reported weren't the real ones. For a VAT-registered business, that is not something you can shrug off.

Before we could even look at any returns, I went through and untangled every one. I sorted the genuine bills from the duplicates and got the VAT position back to what it should have been all in time for the return.

It's slow, unglamorous work. But this is exactly what goes unnoticed for weeks when nobody's keeping an eye on it and then becomes a nasty surprise right when you're trying to close the year or submit the VAT return.

If you’re just keeping it ticking over and nobody's had a proper look at your books in a while, it's worth asking what might be hiding in them. When did you last check?

01/10/2026

How long do you actually need to keep your records? It is one of those questions everyone means to look up and never does.

If you are self-employed, HMRC expects you to keep your records for at least five years after the 31 January submission deadline for that tax year. For limited companies it is six years from the end of your accounting period. Longer in some situations, like if you filed late or HMRC opens a check.

The easiest fix is to stop treating it as a shoebox problem. If your records live in your software, they are already stored, backed up and searchable and the five or six year question mostly takes care of itself.

How are you keeping yours at the moment, paper, spreadsheets or software?

29/09/2026

Did you know a business can be profitable and still be short of cash, both true at once.

I've sat with business owners who are genuinely confused by it. The profit and loss says they had a good month. The bank account says otherwise and it feels like the numbers are lying.

They're not, the profit is real, it's just tied up somewhere. In invoices your customers haven't paid yet or it's already gone out the door to cover suppliers, or put aside for things like tax and VAT which was money that was never yours to spend in the first place.

That's why both reports are needed, not one in isolation. The profit and loss tells you whether the business is performing. The balance sheet tells you whether it can actually meet what it owes. On their own, either can mislead you, together they tell the truth.

I went into this properly in my recent blog if it's useful, link's in the comments.

Has this ever caught you out? The good month on paper that didn't feel like one in the bank?

28/09/2026

Most people think of bookkeeping as data entry and typing numbers into boxes. If only!

Behind the scenes, it's chasing a payment that doesn't match any invoice and working out where it came from. Spotting a subscription nobody remembered signing up for that’s still going out every month. Chasing invoices and receipts to make sure the VAT is claimed accurately. The satisfying moment when all transactions are reconciled, the bank account finally reconciles to the penny and everything balances.

A good chunk of the job is detective work, because life isn’t that straightforward. Following a transaction back to what it actually was, not what it looks like at a glance which can mean multiple categories in one transaction. Split payments made for one bill. Overpayments and underpayments and making sure it all is recorded properly.

The same careful checks every week so nothing builds into a mess by year-end and nothing is missed.

It's unglamorous work and it rarely makes for an exciting photo. But when it's all done properly, I love it. The numbers make sense, the deadlines stop being a panic and clients know what's actually going on.

What did you think a bookkeeper’s normal day looked like?

24/09/2026

Take a deposit upfront

A simple habit that protects your cash flow more than people expect: take a deposit before you start and put your payment terms in writing.

It does two jobs at once. It brings money in before you have done all the work, which smooths out those lumpy months and it filters out the clients who were never really going to pay on time. The ones who hesitate at a deposit are often the ones who would have hesitated at the invoice too.

It does not need to be a big percentage. It just needs to be clear and agreed before the work starts rather than after.

Do you take a deposit upfront, or do you invoice everything at the end and hope for the best?

23/09/2026

If this is your first year as self employed, there's a deadline coming up that's easy to miss because nobody really talks about it.

5th October is the deadline to register for Self Assessment with HMRC.

It's one of those things that's easy to put off, especially when you're in the middle of building something and admin feels like the last thing you want to deal with.

But missing this date can lead to penalties even if you don't owe any tax, so it's worth getting sorted this week.

What you'll need to do is register with HMRC online. You'll then receive a Unique Taxpayer Reference and be set up to file your return by 31st January.

A few things worth knowing before you register:
- You need to register if you earned more than £1,000 from self employment in the last tax year
- Registration is done through your Government Gateway account
- Once registered, HMRC will write to you with your UTR number, which can take a couple of weeks to arrive

If you're not sure whether this applies to you or you've only just realised the deadline is approaching, drop me a message.

It's a straightforward process and I'm happy to point you in the right direction.

22/09/2026

When a set of reports lands most people do the same thing, glance at the profit figure, nod, file it away. The rest barely gets a look.

That's the shame of it, because those reports are answering the exact questions you ask yourself all the time. Am I making money. Can I afford to pay myself. Is the cash in the bank actually mine, or is some of it already owed.

You don't need to be an accountant to read them, you just need someone to show you what each line is for.

This month’s blog walks through the two reports that matter most, the profit and loss and the balance sheet, in plain English. What each one tells you, why they're not the same thing and how a business can look profitable on paper and still be short of cash.

If your own numbers still feel like a foreign language, this one's for you.

If you'd rather hand the whole thing over so you can read your reports without the headache, or talk them through with someone, that's the sort of work I do. Drop me a message.

Can a profitable business still run out of cash? A plain-English guide to reading your P&L and balance sheet, from a Bournemouth and Poole bookkeeper.