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Advice for creating a small business Bookkeeping effortless

October 9, 2021 - by mindadmin

‘Bookkeeping’ is a task that many business owners despise. Entrepreneurs’ innovative, risk-taking tendencies (in which they thrive) may not often mesh well with the precise process of financial planning. For some, it is simply a daunting task, particularly if the business owner has no experience with bookkeeping. Here are our top six suggestions for making the task less overwhelming.

Prevent combining business with pleasure:-
Separating your business and personal finances is a rule that should be followed from the start. Opening a new bank account solely for business transactions not only simplifies spending management but also prevents needlessly high-stress levels when the tax deadline arrives. If you have to sift through hundreds of personal transactions to discover invoices, tax forms, and bookkeeping, you will squander a lot of valuable focus that you cannot afford to lose as a business owner. Separate your accounts from the start to save yourself a lot of trouble and effort.

Keep track of all payments and use good credit control:-
Use your books to keep track of all payments and the dates they were paid or received. This will save you a lot of time looking for them later if you need to refer to them.

         It’s also a good idea to never be late with payments (particularly to HMRC) and to give your clients a payment deadline so you can follow them down if necessary. Maintaining a healthy cash flow is essential, so stick to deadlines. It is a good idea to anticipate your cash flow for a whole year so that you are always prepared; if an issue arises, you will be ready to deal with it. If a client frequently fails to pay and you have issued adequate warnings, it may be worthwhile to reconsider working with them again.

Use accounting software: A solid accounting system will enable you to determine whether your firm is profitable and will assist you in making business
decisions such as purchasing new assets or expanding your company. 

         Many of the business owners we’ve met have never considered utilizing a computer-based accounting system preferring instead to handle their bookkeeping by hand using a pen and paper. This is frequently associated with the anxiety that a lack of bookkeeping knowledge (or a lack of comprehension of bookkeeping at all) will be too difficult to overcome. Accounting software is simple to learn, We recommend that our clients use online accounting software. Accounting software may decrease the hidden costs and times connected with maintaining a fiancé, so don’t be afraid to give it a shot; it’s not as terrifying as you think!

Keep a record of spending:- 
There are numerous company expenses on which you can claim tax credits to decrease your overheads; however, you will need receipts to substantiate your claims with HMRC, so keep them somewhere safe. It’s a good idea to categorize them into different company areas so you can easily find them all. Again, keep business and personal expenses separate so you can quickly identify which ones can be claimed against earnings to lower taxes.

 

Know your limits and when to ask for assistance:-
When you initially start out in business, you may be able to do the bookkeeping on your own, but as your company grows, you may require additional assistance. If you find yourself spending a significant amount of time per week on the books, that is a significant amount of time that you could be using elsewhere. A professional bookkeeper may be able to complete the task in half the time, freeing you up to focus on new company prospects and customer service.

If you need assistance managing your accounts or training on accounting software, our friendly team at Mindspace would be delighted to help; simply drop us a note when you’re ready to chat.