Bookkeeping tips for small businesses
It is easy to avoid making bookkeeping mistakes but to avoid them you need to know what they are. When you start a small business, it is like getting on a rollercoaster and not getting off for a while, your focus may be on getting those sales and it is easy to make mistakes when you do something for the first time. We are here to help you avoid making those mistakes and navigating your business through to the success that you dream of.
Firstly, it is important that you actually do some bookkeeping!
We understand that this might not be fun for everyone but avoiding bookkeeping can have detrimental affects for your business. If your receipts or invoicing is out of control then it is likely that your cash flow is also out of control. If you allocate just a few minutes each day to bookkeeping from the moment you start your business it will become a natural part of your day to day running and you will always be in control of your business.
Secondly, if you get behind with your bookkeeping despite allocating some time each day to working on this then it is important to recognise that maybe you need someone to help you keep on top of your account. Therefore, we would recommend employing a bookkeeper.
The benefits of hiring a bookkeeper are that they are up to date with all the legality and tax implications that you may not be necessarily aware of but at the end of the day the main reason would be that they save time (and money) by allowing you to concentrate on the aspects of your business that you are passionate about and in turn help you to grow your business.
Once you have employed a bookkeeper, even if it is just a few hours a month to start with, it is important to keep them updated. Together decide on a system, maybe you decide to use one of the brilliant software programmes that are available to use now (see previous Blog 'Is Accounting Software for me?') or maybe you use an excel spreadsheet, whatever you decide it is important to update and input from your side.
Another important factor to consider is separating your business accounts from your personal accounts. This could not only include your bank accounts but things like Oyster cards, Parking accounts (RingGo), PayPal etc. This helps to keep the data clean but also with an audit trail, if you ever needed to track a particular transaction for an audit. Also, if you are planning on using cash and sorting out the allocation afterwards, this can be time consuming and is often forgotten about. So, we would recommend using bank/credit/debit transactions for your business to provide track ability to your transactions.
A note about receipts… No one intends to lose receipts for small transactions, but they do have a scary way of getting lost along the way. You may find that snapping them on your phone as you go may be far easier, if you are using Receipt Bank or Wave they can be uploaded to your accounting software instantly.
Do you drive as part of your work? Are you keeping a log of business mileage? Perhaps you could keep a notebook or clipboard within the car to write your trips in? Of course there are apps for everything and there is a great mileage tracker you can sign up to if mileage is a major part of your work. Trip Catcher
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