If you own a small business and are approaching the holidays worrying how you’re going to manage your books, why not make these tips part of your New Year’s resolution?
The prospect of maintaining your books can be a daunting one for many small business owners. Juggling a steadily growing pile of receipts and invoices can certainly start to feel like quite the balancing act. But not to worry, we are here to help alleviate any anxiety about managing your books. Simply follow these tips to stay on top of your finances:
- Keep personal and business finances separate
Have separate bank accounts when you are running your own business, by separating out the two, you will be able to avoid any messy mix-ups in your finances.
- Don’t get rid of receipts and invoices
In a small business, nothing should go to waste. Make sure that you and your staff receipts and/or invoices for any and all expenditure, and attach them to expenses claims. To be safe, keep all records for at least six years.
- Maintain filing system
These records should be simple and easily organised. Sales invoices should be raised and filed in order, and purchases should follow a system that is logical to you.
- Keep your time similarly organised
Working closely with a plan or schedule can help you to best stay on top of your finances. Allotting diarised time to reconcile your bank accounts or update records will mean that it becomes part of your routine, and this can help it to feel like less of a chore. It also means that it doesn’t become forgotten amongst all of the other things you have to do.
Be sure to raise sales invoices quickly and file your paperwork on time. You may be able to remember what happened last week, but not last month or the month before.
- Stay on track of petty cash
In the same vain, you should be keeping receipts for your petty cash, and reconciling amounts regularly. Keeping a keen eye on your cash will help to reduce the risk of loss or theft.
- Bank payments quickly
Once you have these cash or cheque payments it is important to stay on top of them and get them in the bank fast – even if they might feel old school. By doing this, you will reduce the risk of losing them or spending them quickly. Plus, the quicker they are in the bank, the better your cash flow.
- Chasing debtors
Slow payers can cause real harm to your business, and damage your cash flow. Set a clear policy for chasing up debtors. You aren’t loaning money, so your clients need to pay.
- Plan ahead by putting money aside
Putting money aside, perhaps in another account, will mean there are extra funds available in the event that you need them. There will always be future expenditures, such as VAT, so be sure to be prepared by planning ahead.
- Learn the basics
It’s true that you should always have a professional handle your finances for you, but knowing the basics can help you a lot from day to day. If you would like to learn more about finances and bookkeeping, you can find a lot of useful information and tips on our news page – under the bookkeeping tab.
- Trust the professionals
The best way to manage your finances is to enlist the help of a professional. Managing your books can be difficult, especially when trying to manage it alongside everything else you need to do as a small business. Outsourcing your bookkeeping to Rosemary means that your books are maintained regularly, but you don’t have to spend your valuable time doing them yourself. You also won’t need to hire any additional staff – you only pay for the work done – and a bookkeeper is cheaper than an accountant!
If you think it’s time to outsource your bookkeeping, get in touch with Rosemary Bookkeeping, or find your nearest branch here.