Starting a business is exciting but with so many things to juggle, it’s easy to let the financial side slip. Unfortunately, even small accounting mistakes can grow into bigger problems, costing your business money and momentum.

At Modus Accountants, we work with dozens of Oxfordshire startups every year. Here are the five most common mistakes we see and how to avoid them.

1. Mixing Business and Personal Finances

It’s tempting to use your personal bank account for everything when starting out. But this quickly becomes messy.

Why it’s a mistake:

Harder to track business expenses.

Inaccurate financial records.

Missed tax-deductible expenses.

How to avoid it:

Open a dedicated business bank account.

Use accounting software to separate transactions like Xero

2. Poor Record Keeping

Startups often underestimate the importance of keeping accurate, organised records.

Why it’s a mistake:

Makes VAT returns and tax submissions stressful.

Increases the risk of errors or penalties.

How to avoid it:

Keep receipts and invoices digital and organised.

Use cloud-based tools like Xero or QuickBooks.

3. Forgetting About Tax Deadlines

Many new business owners are caught out by self-assessment, VAT, or Corporation Tax deadlines. Modus cleints recieve regular reminders to ensure our clients don’t forget important deadlines.

Why it’s a mistake:

Penalties and interest charges.

Stress and cash flow disruption.

How to avoid it:

Set reminders for all key deadlines.

Work with an accountant to keep you on track.

4. Not Claiming All Allowable Expenses

Startups often overpay tax by not knowing what they can claim.

Examples of allowable expenses:

Office supplies and software.

Business travel and mileage.

Marketing costs.

Proportion of home office expenses.

How to avoid it:

Keep detailed expense records.

Ask your accountant for advice before filing.

5. Not Seeking Professional Advice Early Enough

Many startups try to do everything themselves to save money, but this can be costly in the long run. At Modus we offer all our clients regular strategy reviews to ensure thier business structure is correct and they have the right elements in palce to achieve their goals.

Why it’s a mistake:

Missed tax savings and reliefs.

Inefficient business structure.

Risk of compliance issues.

How to avoid it:

Speak to an accountant early.

Use professional advice to set up your business for success.

Next Steps

Avoiding these five mistakes will give your startup a stronger financial foundation and save you headaches later. Book a free 30 minute call with Modus Director, Mark Spolander, to discuss your new business idea and the best way forward.

At Modus Accountants, we’re passionate about helping Oxfordshire startups and small businesses succeed with clear, practical advice.

📞 Call us on 01993 225030 or 📧 email hello@modus-accountants.co.uk to arrange a free 45-minute startup strategy call.