When you’re starting a new business there are many things to think about and taking care of your business’s financial records is one of them. You are probably keen to keep everything in order but you want to be spending most of your time running your new business.
When starting your business you may not have much in the way of funds or a great cashflow and hence you might not want to initially spend money on having a regular bookkeeper or using accounting software.
So here’s a list of 10 top bookkeeping tips that should help you when you start up your new business venture.
1. Get all your paperwork organised in files or folders – keep your unpaid purchases invoices and sales invoices in a separate file from the paid invoices so you are aware of who still needs to pay you and who you still must pay.
2. If you’re operating as a sole trader you should make sure that you have opened a separate bank account for all your business dealings so you can easily see what transactions are for business and what are personal. For a limited company you should have a company bank account, and in both these cases if you ever make business purchases from your personal account you should keep these receipts separately.
3. Keep your business invoices and receipts organised in files in the same place so you can always find specific receipts and invoices when you need to.
4. If you do business travel and you’d like to claim your business mileage then keep a record of all your business related journeys and include the date, mileage, reason and location visited.
5. If you have a limited company then using a company credit card for all your business transactions is a great way of keeping track of them all. If you are a sole trader then you can take out a credit card that you use solely for business transactions – this will help to make things easy when you’re recording all your purchases. Pay off the credit card balance in full each month.
6. If you work from home then you should keep records of household expenses including mortgage/rent, phone, electricity, etc since you can make a claim for the “use of home allowance”.
7. If you make a note on your invoices of the date that you paid them then this could be of potential use with some supplier queries.
8. Keep on top of things by regularly taking care of the paperwork. Don’t let it build up or you’ll start to get disorganised. Every week or every month would be a good idea.
9. Don’t purchase accounting software to use yourself unless you know what you’re doing otherwise you could make mistakes and leave your financial records in a mess. Everything would then need to be corrected which would involve extra work and expense before your accountant could get the end of year accounts done.
10. Talk to your accountant, or your bookkeeper if you have one, since they will be able to give you advice about what expenses you can claim. Also, they’ll be able to put into place for you an effective bookkeeping system.
You will be able to manage with a simple file system like this but you won’t always have an accurate and up to date picture of how your business is doing and how profitable you are.
It’s best to have all the information that you may need to allow you to make the right business decisions and that’s why it can be very beneficial to have regular management accounts prepared by a bookkeeper.
So when you’d like to make the step from being up to date and organised, to getting useful, valuable information about how your business is performing, then contact an experienced bookkeeper or give your accountant a call.
If you’d like some assistance with your accounts and bookkeeping then Citystream Bookkeepers and Accountants can provide the full range of bookkeeping services . If you’d like us to set up a bookkeeping system for you then contact us at bookkeeping services london .