If you don't know where to start and your accounts and in a bit of a mess - don't fret, there are several simple things that can be don't to help get things back on track. Here are my top five tips to get you started!
1. Separate your business finances from your personal finances
One of the most important things that you should do is get a business bank account. If your personal and business transactions are all mixed up, then this will take so much more time to reconcile at the end of each week or month. Most banks offer at least 18 months free banking before charging any sort of fees and The Royal Bank of Scotland and NatWest even give their business account holders FreeAgent cloud accounting software for free - a huge plus!
2. Get a mileage app
If you use your car for business use and are out and about regularly for meetings, mileage is often overlooked and can add up to hundreds if not thousands of pounds over the year. Instead of spending time looking over your diary and trying to remember were you have been, get an app to record all of you journeys for a few pounds a month and then upload the data into your accounting software. This will save you hours of time over the year and you know you haven't forgotten to claim back what you are entitled to.
3. Invoice timely
If you send out invoices to your clients, then make sure you do this immediately after the work has been completed. You are more likely to get paid sooner than if you send the invoice out a few weeks later. This can drastically affect your cashflow. You may have bought materials or paid for other goods and services upfront, if you have to wait several weeks to get paid then you will be out of pocket and quickly this could become a problem financially.
4. Credit control
Make sure you regularly reconcile your payments received with invoices due. It is very easy to just assume people have paid and then a few months later realise that there are invoices which have been overlooked. Trying to receive money for goods and services several months later is much more difficult. I recommend having accounting software with live bank feeds so that you can match the invoices to payments as they enter your bank account and that way you will never lose track.
5. Keep all of your receipts and purchase invoices
HMRC state that all business records should be kept for up to 6 years. It is very important that all receipts are kept and stored securely. VAT registered businesses will need proper records to be able to claim back any VAT paid on qualifying purchases and all businesses must keep records for their expenses for tax purposes.
If your business has a lot of purchases and the receipts are hard to manage, there are various apps which can help to store this information and process it into the accounts.
If you follow these top five tips then you will have made a good start in keeping your accounts on track. If you would like any more information on anything mentioned here or a get some support with you accounts, please call Rebus Bookkeeping on 07720910886.