Bookkeeping goes with the business territory, yet many business owners and entrepreneurs turn it into a fearsome task. Far from being a necessary evil, bookkeeping should be an enlightening process that lets you regularly take the business’s pulse, averting disaster and fostering success.
Here are five ways to improve your business bookkeeping:
Learn About Bookkeeping
This may not seem like a quick improvement, but it’s a quick decision that can lead to vast improvements in the weeks and months to come. The reason most people don’t stay on top of their business accounting is that they don’t thoroughly understand what they’re doing or appreciate the benefits of accurate, up to the minute books.
If the thought of bookkeeping creates a dark fog in your mind, swotting up on basic bookkeeping can let in some much-needed light. Once you have a clearer picture, you’ll not only know where income and expenses meet, you’ll make stronger future growth decisions and pave the way for confident financial planning.
Keep Things Simple
Are you drowning in paperwork or wading through endless complex calculations you don’t need?
A very small business or sole trader operation has far simpler bookkeeping needs than that of a large corporation, so if you’re trying to work a system that’s designed for companies with employees (think payroll and PAYE, NI and Workplace Pensions or VAT), you’re making your accounting more difficult than it needs to be. Cut through the complication by knowing exactly what records you need to keep, and choose bookkeeping software you can tailor to your needs.
If you don’t know where to start, a conversation with an accountant can set you on the right track, or you could ask at the local chamber of commerce where there are often courses or workshops.
Don’t let basic tasks such as bank reconciliation pile up. It’s far better to schedule a half hour at the end of the working day and enter all that day’s transactions than it is to face two hours work over the weekend. Letting it pile up only gives more of an excuse to procrastinate and you’ll end up with a large bookkeeping mountain to climb.
Take Advantage of Digital Technology
Mobile, cloud technology makes business accounting so much simpler. For one thing, you have access to bank accounts and bookkeeping software wherever there’s an Internet connection and on whatever device you have to hand, including your phone.
Cloud accounting packages also offer distinct advantages over those run from a local computer network. Their ‘always on’ nature makes it possible to link a bank account, meaning all payment and receipts are uploaded and updated daily. This takes some of the pressure off small business owners, as all that’s needed is a quick login to check what’s happening and do some basic reconciliation.
A further advantage is easy invoice generation and tracking. Some cloud accounting packages also allow for project time tracking, making hourly billing more straightforward.
Moving your accounting to the cloud is relatively simple and, while it takes some initial effort, even tax returns are less of a headache once it’s set up.
Get Professional Help
Like it or not, every business has a legal obligation to keep their books straight and their records organised. Ignorance is no defence in the eye of the law. Even if you don’t need professional accounting services help all through the year, a chat with an accountant will put you on the right track so you don’t omit some vital piece of information in your bookkeeping records.
There are certain times of year when an accountant is a valuable asset, of course, and if you’re keeping your books in a way that’s compatible with their preferred systems, compiling your tax returns or calculating your VAT will go much smoother, saving time and money on both sides. You’ll also know you’re claiming all the expenses you should, which can shave quite a bit off your tax bill.
If bookkeeping is a massive chore, adopting one or two of these improvements will simplify the task. And who knows, you might even come to enjoy it!