When running a business of any size it’s incredibly important to get your bookkeeping right. That said it seems to be the one thing that business owners dread the most.
So here are our top tips for taking the hassle out of your bookkeeping
- GET ORGANSIED – I know it sounds easy.. But you really don’t want to be scrabbling around at the last minute to find things so just get a system in place now and stick to it. It can be as simple as just buying a box file and making sure that at the end of everyday you put all your receipts and paperwork into it so they’re in one place. The plus side of doing this is they also end up in date order
- LITTLE AND OFTEN – It’s very daunting to be faced with a large backlog of paperwork so set some time aside to do your bookwork regularly – if done once a week you’d be surprised at how little time it can take. Remember that bookkeeping is part of running your business so don’t feel that you have to do it in the evenings just by allocating half and hour you can break the back of it
- GET YOURSELF SOME SOFTWARE – We’ve been advocating Cloud Accounting for many years now. If your turnover is above £85,000 then you are now required to keep your records digitally but just because its not ‘required’ doesn’t mean that it wouldn’t be good for you. Our favourite at the moment is Xero – ask us to set you up with a trial. Cloud accounting automates much of the bookkeeping process but be warned.. make sure you get some help to set it up or some training on how to use it (Xero do some great free training videos or we offer 1:2:1 training). The adage ‘Rubbish in, rubbish out’ rings very true here. We’ve trained for years to get our knowledge, you can’t expect to pick it up without a little bit of effort
- KEEP BUSINESS AND PERSONAL SEPARATE – keeping things separate will make everything a lot easier. Sifting through sometimes months later and trying to remember whether that £4.99 in Tesco was for paper for home or work is not fun. The easiest and quickest way to do this is to get yourself a business bank account with a debit card then use the debit card for everything. This helps as you can just look through your bank statements and see every business expense that you’ve incurred. It also helps in terms of lost receipts as in case of an investigation you ‘need to prove to a reasonable HMRC officer that you incurred the expense’ – so having the transaction on your bank account counts as proof. If you’re a Sole Trader you don’t have to use a designated business bank account but a limited company does. And if you can’t face a meeting at the bank then try one of the now very popular online banks such as https://www.tide.co/partners/bowes-brooks/ you simply take a photo of your passport, take a selfie on your phone and voila you have a bank account number and sort code – so no excuses!
- AUTOMATE – There are so many apps out there now that can automate much of the bookkeeping process so take a minute to see which ones could save you time. We’ll be doing a blog post shortly on embracing the cloud and time saving apps so watch out for that
Bookkeeping can be overwhelming if not handled properly, but if you observe the best bookkeeping practices, you’ll find that this task doesn’t have to be that intimidating at all. Best of all when up to date and accurate you know what state your business is in and can make better decisions on a day to day basis.