Small business bookkeeping might sound like unnecessary admin at first, but it’s essential for any business. If you run a small business, keeping the books in order could be the difference between success and failure. It might not be the most exciting part of running your business but keeping a beady eye on how your company is performing will help make sure it’s running as efficiently as possible. If the thought of bookkeeping is daunting, do not fear – here are some tips to help get you started.
Do Your Bookkeeping Regularly
The most important thing to remember when it comes to small business bookkeeping is to set aside a time to go over your books regularly. Ideally once a week is best. Even if just for an hour, updating your books little and often will help keep things in check and prevent paperwork from piling up. Whatever you do, try to make sure you’re looking at your books regularly so you can keep a keen eye on the financial health of your business and spot problems as soon as they arise.
Separate Business & Personal Finances
Managing the books becomes a lot easier when you have separate personal and business accounts. Trying to keep track of your business incomings and outgoings becomes a nightmare when you don’t separate your accounts. Not only will it be a lot easier to track your expenses when you have a separate business account, it will also be a lot simpler to fill in your tax return.
Use Tools To Help
Calculators and paper are fast becoming things of the past. If you’re doing your own bookkeeping it’s worth spending a couple of hours familiarising yourself with spreadsheets. A few simple formulas could save you hours of complicated calculations and can reduce the risk of human error. A spreadsheet is the simplest tool for small business bookkeeping, and you might even find that a free Google Sheets spreadsheet is all you need. However, more advanced tools exist that can make bookkeeping even easier.
Keep All Your Records
Get into the habit of keeping all of your paper records including invoices, receipts and PAYE records. Develop a filing system that makes it easy to find everything when it comes to submitting your tax return. Most importantly, make sure you stick to your system! The temptation to quickly put records in the wrong place for ease in the moment can cause huge headaches when it comes to submitting your tax return. Take the extra 30 seconds to do your filling right and you could save yourself hours down the line.
Track Your Invoices
Track your invoices carefully. Late payments can really hurt small businesses, so have a system in place to follow up immediately with late payments. You could even add fees for late payments – or it might be better to offer incentives for early payment, such as a small discount.
Enjoy Better Small Business Bookkeeping
Keeping on top of bookkeeping is essential for a small business but it doesn’t have to be scary as long as you commit to regularly updating your accounts. If you get a system in place and stick to it, there’s no need to fear taking your business’ bookkeeping into your own hands.