Updated: Apr 5
Are your books overflowing with invoices, bills, receipts and paperwork? Not sure if your bookkeeping is being done right? Perhaps your balances are not matching at the end of the month?
Your not alone. Bookkeeping is one of the most time consuming activities that a business faces, made evermore daunting by the fact that it never ends and tax deadlines looming.
With tax season just about to start here is 10 tips to help you with your own small business bookkeeping.
1. Separate Business And Personal Spending
Construct a wall between your business and personal spending today. Build it high and never let the two mix. This is best done with a separate business bank account. They are easy to set up in most high street bank locations and can even be done online with ease.
If you do choose to share a bank account for personal and business spending your Bookkeeping job just got harder. You will have to diligently separate your transactions and make sure not to get mixed up.
2. Don't Leave Anything Out
Always take a receipt for business purchases, this goes for any staff you have on your payroll too. You need to keep records for 6 years in order to keep the tax man at bay. Should you be investigated and fail to show proof of your purchases you could be in big trouble.
3. Separate Invoices & Bills
File your purchases and sales invoices separately. Sales invoices should be raised and stored in sequence to keep everything easy to find. Bills and purchases can be filed in a lot of ways. We like to separate by month and then supplier.
A4 folders filled with polypockets are a favourite way to store your physical paperwork. You can also scan your paperwork and keep digital records, which keeps physical clutter to a minimum. Just remember to stick to a method once you start.
4. Make It A Habit
A garden left untended soon grows weeds, the same happens with bookkeeping but instead of weeds you get unpaid invoices and bills! Bookkeeping is something that needs constant attention and care. Schedule a time for it and make bookkeeping a priority.
5. Don't Neglect Petty Cash
Keep your petty cash receipts close and reconcile your petty cash account regularly. Every time you use cash for a business expenditure add it to your bookkeeping and keep the receipts! Otherwise you run the risk of loosing track of your money, resulting in profit loss and time loss trying to work out where all your money has gone.
Keep an eye out for a follow up article with 5 more booking tips for small business.