Six Top Bookkeeping Tips For Small Businesses
Here are team4’s top bookkeeping tips for small businesses, as we know that running any company is not straightforward. It’s key that you get those accounting decisions right from the outset. As a small business owner, you will probably find that you are trying to keep a lot of plates spinning. There really is a lot going on and keeping tabs on incomings and outgoings although extremely important can slowly go to the bottom of that ‘to do’ list. As a small business owner, it’s easy not to maintain the books. You may start off enthusiastically, but as your business grows, your time can be spent doing more and more things other than keeping track of those bills and invoices. It’s true that poor financial management is the most common reason why businesses fail. Here at team4, we don’t want that to happen to you. So that’s why we offer no fuss bookkeeping services to our worldwide clients from our offices in East Sussex. Outsourcing your accounts will enable you to keep right on top of your company’s financial performance. This will include keeping track of assets, cash flow and ensuring all business expenditure is accounted for. In the long term, you will be able to make more informed business decisions.
Top bookkeeping tips for small businesses
- Keep business and personal finances separately
- Maintain records of every payment and keep all receipts
- Be very strict with deadlines – tax, VAT and client payments
- Choose the right accounting software for your business type
- Keep up to date with tax rules and compliance
- Know when it is time to outsource your bookkeeping
Keep business and personal banking separate
By having a separate bank account for your business, it will save you time as you will only have to scroll through one set of bank statements. You will also have clear visibility of your cash flow and any tax-related documentation is transparent and ready. Your business finances stay in your business account making you a lot more organised.
Maintain payment records and keep receipts
One of our top bookkeeping tips for small businesses is to make sure you maintain payment records on a regular basis. These should be neat and tidy so you know where everything is, which will save you time searching for payments and receipts. This will help you to track expenses and identify those that can be claimed against profit to reduce tax.
Remember and be ready for tax and VAT deadlines
A definite ‘no, no’ is making late payments to HMRC, and VAT. Be aware of tax deadlines and prepare in plenty of time, without making any mistakes. This will give you the peace of mind that your records are accurate and VAT and tax are being paid on time. You can then breathe again and wait for the next deadline. And don’t forget your clients and customers need to pay on time too!
Choose the right accounting software for your type of business
Accounting software will make your bookkeeping and accounting much easier and ensure your incomings and outgoings are organised properly. Initially, Microsoft Excel or similar will probably do the job, but features are limited. A good bookkeeper will be able to recommend the best software for your small business to ensure accounting is much simpler, effective and efficient. Accounting software will allow you to produce financial statements such as balance sheets, cash flow and profit and loss statements. Accounting software will also log revenue and expenses and do a lot more.
Keep up to date with tax rules
Tax rules are ever changing, so one of our top bookkeeping tips for small businesses is to keep up-to-date and know how any changes might impact your small business. You will need to think about income tax, National Insurance, VAT and business rates. Do your research so you stay tax compliant or ask your bookkeeper or accountant for advice.
Tell tale signs it is time to outsource your bookkeeping
When you start your business, you may find that you do have the time to do the bookkeeping yourself. However, as your business grows, you may find that it is impossible to keep accurate and up-to-date records. You may come to a point when you are struggling to manage the day-to-day finances of your small business. It’s important to realise when the time has come to outsource your bookkeeping. A good guide is to calculate how much time you are spending on managing your finances and whether this is a good use of your time. Compare the cost of your time with that of hiring a bookkeeper. Here at team4, we can calculate how long we would need to do your accounts, which could range from as little as a couple of hours a week to half a day or more. Other tell tale signs that it is time to call in a professional is when bills and your staff are not being paid on time. You may also find that you are continually chasing clients and you are struggling with tax, VAT and expenses.
How can team4 help you with your small business accounting?
As a small business owner, it can be very tempting to think you can do your company accounting and save costs. However, not using a trained professional can be false economy and cost hundreds, if not thousands of pounds in the long term. It might even cost you your business. We hope you have found our top bookkeeping tips for small businesses helpful. If you need to outsource your accounts, including setting up the right accounting software for your small business, please get in touch with team4 by calling us on +44(0)1825 763378 or email info@team4bookkeeping.co.uk to find out more.
