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  • Rosie Morley

Time to Spring Clean your accounts for the new tax year

Updated: May 16, 2019

Our Guest blogger, Kate Curtis runs Digits Bookkeeping

As I write this, the sun is shining, the daffodils are starting to pop up in the garden and the chocolate eggs are well and truly on the supermarket shelves. This can mean only one thing, spring is on it’s way!

It’s that time when people look at their home and take on the annual spring clean. We declutter our homes, fix those small niggly jobs we’ve been avoiding, and start to tend to the garden now that the days are getting warmer and the nights are getting longer. But, this is also a great time to look at spring cleaning your work space and in particular your paperwork. It’s time to empty and recycle that old shoebox, and get a great filing system sorted. I can hear you cheering from here. “I just give all my paper work to my accountant in January and they do it all” This is unfortunately common. It’s not great for the accountant but it’s also really bad for you. How can you be sure that everything that you have handed over is accurate and fully inclusive? If you can keep adequate records of all your financial transactions, your accountant will thank you for it and you may save some money on accounting or bookkeeping fees as well as some tax savings.

The new tax year will start on 6th April. The perfect time to get your bookkeeping systemised is NOW! Here are 6 easy steps for you to follow for bookkeeping success.

1. Organise your paperwork.

This can be a bit overwhelming depending on your level of paperwork, but there is just no point in going any further with these steps if you haven’t done this bit first. Plan some time in to do this when you can focus on the task in hand and not be distracted. If you get distracted, you will still have a pile of paperwork that you will never get around too again. Put some music or a box set on and maybe even rope in a friend. Clear a space on the floor or dining table and make 12 piles, one for each month, maybe even mark them out with a post it note so you can sort quickly. You need to empty out that shoe-box, bag for life, glove box, kitchen drawer or whatever is your current storage vessel of choice. Don’t worry too much at this stage about what the document is, just put it the pile of the right month. That is the month that the document is dated and where applicable not the date that it was paid.

2. Stationery.

Grab yourself an A4 binder, a lever arch one If you have a lot of paperwork. You’ll need a pack of dividers and possibly some plastic wallets for loose receipts, A stapler and a whole punch. Simple stuff but the essentials!

Set up your folder

You’ll need at least 5 basic divisions in your bookkeeping file. Add others as you feel fits your business.

Customer Invoices - The invoices that you send out to your customers.

Supplier Invoices to be paid – keep outstanding supplier invoices separate to help you assess your cash flow.

Paid supplier Invoices/receipts - Those that you have received from your suppliers that you have paid in full. You can also pop loose receipts in here in a plastic wallet.

Bank statements – Self explanatory. Add another divider for any savings accounts or credit cards for those statements.

Other Important documents – Here you can file any correspondence from HMRC, Companies House if you’re a Ltd company. banking or finance agreement letters and any insurance documents. You may find it helpful to group these in a labelled plastic wallet for each header so you can quickly find what you need.

These five divisions should identify the main documents that will help you, your accountant or bookkeeper when it’s tax return time.

Now grab the first pile of paperwork and start to put everything in order. You can file your invoices in tax year order, April to March (most common) or financial year if you have a Ltd company with a differing year. When a monthly pile of paperwork is huge and difficult to work with, separate it out into two dates 0-15 and 16-31, this makes the sorting and filing a bit easier to manage. Staple those loose receipts together and put in their own plastic wallet behind the supplier invoices for that same month, they have a habit of slipping out of larger piles of work and getting lost.

3. Emails

I’m not about to advise you on how to have a clean inbox but I would suggest that you create a folder for emails that you have that are bookkeeping related. I mean Amazon orders, Paypal receipts, Eventbrite confirmations – you get the idea. As soon as they come into your inbox drag them into your finance or bookkeeping folder. Don’t print them out until you intend on filing them, otherwise that kitchen drawer is going to fill up again in no time!

4. Nominate a day

Bookkeeping isn’t exactly “fun” but the feeling of having all your business records sorted can have a great calming feeling. Decide when you’re going to do your bookkeeping. If you’re business is a bit smaller right now, maybe once a month is enough but if you’re business is growing you may need to step this up to fortnightly or even each week. Decide on the date, block it out of your diary and stick to it. Don’t let all your hard work up to now be in vain. File all the hard copy paperwork that you have in the right section and in chronological order. Be sure to print out those emails that you’ve been filtering in your inbox. Once all your paperwork is to hand, grab your bank statement and against each item on the statement, tick off the ones that you have the matching for. Investigate and make a note for the ones that you don’t. It may be tempting to skip this bit, but this will help you ensure that you’re in control of your bank account and help spot any anomalies, duplicated payments or lapsed subscriptions still being charged for.

5. Look at the numbers.

You can adapt a note book, use an accounts book from a stationers, or use an attractively designed income and expenditure book from fellow small business, Doris and Fred

If you’re confident with excel, create a spreadsheet. The simpler the better. Don’t go mad with filters and formulas. You just need a sheet for each month. With either of these options, Have two columns, one for everything that went out and one for everything that went in. Tally it up at the end. You must check that the end balance matches your bank statement, very important!

So just a few points to end on from your friendly bookkeeper that will make filing your taxes a breeze.

Have an obvious place in your home (hallway or kitchen perhaps) that you can empty receipts and post into that relate to your business. Something clear like this so that you won’t want to fill it to the brim with unsightly and confidential paperwork

When you pay a supplier, record on the document the date that you paid it and how you paid it (BACS, Credit card or personal card for example)

Don’t get behind on your paperwork. It’ll make the task at hand so much more bearable when it’s done quicky and with recent memory!

Keep household utility bills, mortgage statements and mileage records to hand, in case they can be used by your accountant to save a small amount of tax if applicable.

Hand your completed file to your accountant or bookkeeper well in advance of the tax deadline. If you want to apply for finance or a new mortgage, you will need your most recent figures. Approach them in May, head held high, clutching your amazing bookkeeping folder.


They will really thank you.

Look at accounting software and apps for your business finances when life is getting too busy and automation is the natural next step. Xero and Receipt Bank are my personal favourites. Seed accounting solutions offer training on Xero to get you started.

If in doubt, hire a bookkeeper. They will add so much value to your business and you will never look back.

Hopefully, that has been helpful and spurred you on to spring clean your business finances!