The thought of having to balance the books each month can have some small business owners panicking. Not to mention having to deal with the ever-growing pile of invoices and receipts. If this sounds familiar, try these ten bookkeeping tips …
- Keep personal and business separate
Separate bank accounts are a must when running your own business. Keeping personal and business finances separate will help to ensure there is no messy mix-ups.
- Don’t throw anything
Nothing goes to waste. Ensure your staff keep receipts or invoices for expenditure and attach them to expenses claims. You then to keep all records for at least six years, just to be safe.
- Filing your paperwork
Filing paperwork should be simple. Sales invoices should be raised and filed in order, whilst purchases should just follow a system that is logical to you.
- Stay on top
Working to a routine, a plan, a schedule can help you to stay on top of your finances. Diarising time to update records or reconcile your bank account will mean you stick to it and it doesn’t become a forgotten chore.
Raise sales invoices quickly and file paperwork on time, you’ll be able to remember what happened last week but not last month or the month before.
- Petty cash is pretty important
Reduce the risk of theft or missing cash with a keen eye on petty cash. Keep receipts and reconcile the account regularly to stay on top of things.
- Getting’ paid
Cash and cheque payments might be old school but it’s important you stay on top of things and get them banked fast. You’ll reduce the chances of losing them, spending them and the quicker it’s in the bank, the better for your cash flow.
- Chasing debtors
Set a policy for chasing debtors, as slow payers can cause real harm to your business and cash flow. You aren’t loaning money so your clients need to pay.
- Plan ahead
Putting money aside, perhaps in another account will mean there are funds available should HMRC come knocking. There will always be future expenditure such as VAT so plan ahead.
- Learn the basics
You should always have a professional handle your finances for you but knowing the basics can help you day-to-day.
- Brings in the pros
To stay compliant and out of trouble, you should always look to hire a professional. Work with a local bookkeeper or speak to your accountant for support. You are good at what you do so leave the finances to those that are good at what they do.