Make Regular Time for your Finances
Bookkeeping is boring. For many business owners, there’s always something else to do that’s more important or more enjoyable, but the longer it’s put off, the more arduous it is when finally addressed. More importantly however, the longer you leave it, the less likely it is that your records will be accurate, getting you into trouble with HMRC. As soon as is possible, the best move is to set aside a regular timeslot every week. It only needs to be for thirty minutes to an hour, but making a habit of keeping your financials organised will prove really helpful in the long run.
Keep it Simple
There’s no need to over complicate the bookkeeping process. If you use specialist software, it’s OK not to use the areas of it that aren’t relevant to your business. In fact, the more complex your system is, the more likely you are to categorise transactions inconsistently or incorrectly. Ensure your bookkeeping system is robust, but do try to ensure it’s as simple as possible. One of the key things for business owners is efficiency, so keep it streamlined but strong enough to ensure you’re confident it’s accurate.
Track your Invoices
This is a key aspect to get right, especially with regards to cashflow. Develop a process for chasing payments, beginning with issuing a second invoice, through to phone calls and perhaps even implementing penalties for extremely late payments. It is not enough to simply administer a procedure for keeping track of invoices and payments; you also must have a plan of action for when payments are one, two or three months late. It’s easy to forget that the end of the billing process is not when the invoice has been sent, but when payments is received. Every day that a payment is late, is effectively an interest free loan you’re providing your customers with, negatively impacting on your cash flow.
Try to Reduce Manual Input
Not only is posting transactions manually a time consuming process, it also increases the chance of errors creeping into your records. There are many new pieces of software available now to help reduce the bookkeeping burden. For instance, online accounting programmes often have bank feeds allowing the user to pull their bank data directly into their accounts, rather than having to manually upload each statement.
If, despite these hints and tips, you’re still not managing to keep on top of your bookkeeping, come and speak to us about it. In many cases, outsourcing at least some of the bookkeeping process can lessen the cost of preparing the year-end financial statements, as we’ve already completed some of the work and ensured the financial records are in order. This, in addition to the valuable time outsourcing it can save you, may mean it’s the right option for your business.