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How to stay on top of your Bookkeeping

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Mika, Staff Writer

Friday, 16 April 2021

A shudder of dread normally follows the admission that the company books need doing. Though as a business owner, you’ll know how important it is to complete your books both regularly and accurately. 

Whether you’re new to filling out books, or if you’d like to improve your strategy we’re here to share some helpful tips to help make the process a little easier. 

Here’s our guide on how to stay on top of your bookkeeping to tell you more.

Don’t put it off 

Like with anything you do in life, it pays to be prepared ahead of time. There’s no point in trying to rush your books the night before you visit your accountant. Doing so will mean you’ll make mistakes and put unnecessary pressure on yourself, especially as it’s an impossible job! That’s why little and often is the order of the day. 

Some people choose to complete their books every day or once a week (or have a professional bookkeeper do it for them). This method will ensure what you submit is accurate, and will help avoid fines from HMRC for submitting an incorrect or late tax return.

Get a business bank account

It can be tricky to rummage through receipts to determine which ones were for your business, and which are strictly personal expenses. Plus, your personal bank account isn’t designed for business use. It won’t be able to give you the tools or insights needed to manage your business properly.

However, with a dedicated business bank account, you can keep business and personal expenses strictly separate. Many banks also offer discounts and other special incentives or tools for opening a business bank account with them. In terms of your bookkeeping, having a dedicated business account is far more professional and easier to track too. 

Use plastic

Cash in hand is frowned upon at the best of times, but when it comes to your books, it can be very difficult to track physical money accurately. However, by using debit or credit cards every transaction will be backed up to the penny by your bank. It will also tell HMRC where the money came from should they ask, which you can’t do as easily with cash. 

Keep your receipts

Receipts - whether they be pieces of paper or emailed to you - are a record of purchases you have made. If you claim items on your tax return then you’ll need the receipts to back this up. HMRC could ask to see proof of your claims at any time even after you’ve submitted your return. 

These days, it’s never been easier to keep track of your receipts as many apps will do this automatically for you. However, if you choose to hold onto your physical receipts, make sure you do so as they are essential for bookkeeping. 

Hire a Bookkeeper

Bookkeeping is time-consuming and a lot rests on the details you record being accurate. Many business owners hire a bookkeeper for this very reason, especially when mistakes or late submissions can be very costly for your business. Bookkeeping also requires a certain set of skills such as a head for numbers which not everyone has. 

If you want to keep on top of your books, then the small cost to outsource yours to a professional is well worth it. When it comes to handing your books over to your accountant (or HMRC if they order an inspection), you’ll be safe in the knowledge that everything you are showing them is accurate and up to date. 

To sum up

Rather than hiding your books away pretending they don’t exist, they should be a regular part of your routine. Bookkeeping isn’t the most exciting job in the world but is a responsibility you need to take seriously as a business owner.

By starting early, getting organised and hiring a professional if you aren’t sure what you are doing, your bookkeeping will soon become a doddle rather than a chore. 

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