When you start out in business everything you do is exciting and new, and the duller aspects such as doing your expenses are even fun.
But what about when the bookkeeping stops being new and exciting and becomes repetitive and mundane?
Little and often
Bookkeeping can be a chore and there’s no getting away from it. You should do a little bit regularly, rather than leaving your papers to pile up and then having to spend hours organising and cataloguing them.
Set aside a regular slot to do your books. This will not only make the job feel less onerous but will also help you have accurate, up-to-date information available for your business. Make it a time when you’re fresh and alert and have enough energy to get past the ‘oh, I don’t want to’ groan in the back of your mind.
Keep it simple
Don’t make your bookkeeping more complicated than it needs to be, because this will only take up more time than it needs to. For example, if you’re paying your costs straight away, don’t worry about entering bills. Put them into your books as bank payments to the appropriate category.
Entering a bill and then showing that bill as paid would take twice as long, and if you’re paying immediately, you don’t need to do that anyway!
Issuing customer invoices on a timely basis is crucial. For one thing, if your customers don’t have an invoice, they can’t pay you, which means you could run out of cash to pay your bills. Also, if you’re registered for VAT and are invoice accounting you should invoice your customer within 14 days of supplying the goods or service; otherwise you have to include the VAT on your return at the point when you make the supply, not as your invoice date. Make sure you include time to issue your customer invoices in your bookkeeping period each week.
Don’t lose that piece of paper!
If you miss expenses out of your accounts then you could end up paying too much tax! By using an accounting system, you may be able to record an expense such as a train journey or cup of coffee as soon as you’ve incurred it, and then you don’t need to worry about losing the receipt.
Let the software do the work
As well as the tools we’ve already seen, you can save yourself a lot of time in other ways. Check whether your accounting software makes use of automated bank feeds, which pull in your transactions from your online bank account directly into your online accounts. This way, you won’t have to log into your bank account, download a file and manually upload it.
You can also file your VAT return online direct with HMRC, instead of having to enter your details on to a separate screen. It gives your accountant access to your accounts so that you don’t have to go through the trouble of exchanging spread sheets with him/her and wondering who has got the latest version.
In conclusion, bookkeeping may never be your favourite business task, but by making it as simple and as automated as possible, you can at least save yourself the spectre of the looming pile of paperwork to plough through!
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