There is one thing that most small business owners loath to do and that is bookkeeping.
We understand, there are a lot more riveting things you could be doing with your day! However, it is a legal requirement, so it needs to be done.
Good bookkeeping and accurate records are important in keeping your company running and financially healthy.
Here are 8 top tips for small business on how to improve your bookkeeping:
1. Procrastinating is a no-no
Are you a procrastinator who leaves everything until the last minute?
Well, with bookkeeping, you can’t be! It can quickly get out of hand and pile up on your desk.
It is important that you keep on top of financial deadlines, for example Making Tax Digital on 1st April 2019.
MTD is a requirement for VAT-registered businesses with a taxable turnover above the VAT threshold to use the MTD service to keep records digitally and use software to submit their VAT returns.
If you feel like you don’t have time to do your bookkeeping and run other parts of your business as well, you can give Rosemary Bookkeeping a call to help with all of your bookkeeping needs.
2. Bad filing systems
You need to make sure, as a business owner that you are keeping all of your old receipts and filing them correctly with accompanying paperwork.
If you’re reading this and thinking, “oh dear I don’t keep my receipts”, don’t worry there are plenty of business owners like this around the UK.
Get into a habit of when you get in the office every morning to pop your receipts in a folder. Even if this is being filed correctly later that day, at least you have made a start.
Are all of your invoices and bills in sequential order? If they aren’t, then they should be! This will make life a lot easier when it comes to any deadlines, or audits etc.
A quick tip is to start using cloud-based software. This software is very useful and saves you a lot of time when it comes to filing. It can scan your receipts, input important information about your business cash flow and also generate invoices.
3. Mixing business with personal expenses
If you’re doing all of your bookkeeping yourself, and mixing your business and personal expenses then you’re making your bookkeeping a lot harder.
You would have to sit and sift through hundreds of receipts and separate them into business and personal.
If you initially keep them separate, then this is something you will not need to do and will give you time to do other important tasks.
When the tax return deadline comes around, if you’re organised and have split your business and personal expenses, then you’re more likely to pay the right amount of tax for your business.
4. Being consistent with your accounts
If you can, set the same date every month to sit down for a good few hours to do get your bookkeeping and accounts in order for the last calendar month.
If you feel like you’re bogged down with too many other tasks, then you can always contact Rosemary Bookkeeping to take over the bookkeeping side of your business.
5. Pay electronically
An easier way to keep an eye on and make your bookkeeping easier is to make sure all business transactions are paid on your business card and not with cash.
This is obviously, because of the information your bank would provide on a statement; amount, date and the recipients/company name.
6. Employee classification
Many businesses have different classifications of employees, be it full-time employees, part-time employees and independent contractors.
Keeping these separate and correctly classified is important to avoid such things like any overpayment of taxes or misfiling.
7. Backup, Backup, Backup!
We all know what technology is like, it can decide to turn off or have some kind of error at any time.
This is why backing up your data securely on a cloud-based platform is extremely important!
You need to make sure this is a secure platform that works in conjunction with GDPR to ensure the safety of your data.
8. A light bit of reading
You would be surprised at how many business owners don’t read financial statements and just add them to their procrastination pile.
There are plenty of reasons why financial statements can help with your business and avoid a financial breakdown. Here are a few reasons:
- See current/upcoming financial trends within your business sector
- Gain insight into maximising your tax deductions for the year
- Share with existing/potential investors as to how your business is performing
- Stay in control of all of your cash flow
Those are but a few reasons why financial statements can help you run a business and keep your bookkeepers happy!
If you feel like you don’t understand the bookkeeping side of your business, or just don’t have time to do it, you can always contact your local Rosemary Bookkeeping office here.