To celebrate Valentine’s Day on 14 February, chief accountant at FreeAgent, Emily Coltman, gives her top tips for rediscovering the love for your business bookkeeping.
Running your own business is a bit like being in a long-term relationship. In the beginning, everything is new, and even the supposedly dull things like doing your expenses can be fun and exciting.
But, once the honeymoon period is over, you might start to find tasks like business bookkeeping lose their appeal and start to become repetitive and mundane.
How can you rekindle the passion that you felt in the early stages of your venture? Here are four tips to help you fall in love with your business bookkeeping.
Keep it simple, and do it often
Unfortunately, there’s no way to make your bookkeeping disappear completely, but you can learn to enjoy doing it.
The trick is to do a little bit regularly, rather than leaving a pile of receipts and bank statements to pile up and then having to spend hours organising and cataloguing them.
Try setting aside a regular slot, say an hour each week, to look at your current financial position, create, send and chase invoices, and log your most recent expenses.
Make it a regular, scheduled part of your week and you’ll make the job of bookkeeping feel less onerous while also maintaining accurate, timely, up-to-date information about your business’s profit and cash flow.
Keep track of your receipts
If you miss expenses out of your accounts, then you risk not paying the right amount of tax you owe. Instead of ignoring those fiddly little expense receipts, make sure that you log them all as you collect them.
The majority of micro business expenses tend to be under £20, but many business owners feel these are too small or insignificant to claim. However, those little expenses all add up, so it’s important to stay on top of them.
By using a record-keeping app – or an online accounting system – you may be able to record an expense such as a train journey or cup of coffee as soon as you’ve incurred it.
Just photograph your receipts on your mobile phone and attach them to your expense records while you’re on the go, so you’ll never miss out on tax relief again.
Invoice promptly and accurately
It’s important to invoice your clients as quickly as possible, so that they don’t forget about the work you’ve done for them and fail to pay you on time.
But it’s also important to make sure you get your invoices right, otherwise you may struggle to get paid.
For example, if you’re registered for VAT and are invoice accounting, did you know that if you don’t invoice your customer within 14 days of supplying the goods or service, you have to include the VAT on your return at the point when you make the supply, not as at your invoice date?
Make sure you include time to create, send and chase your customer invoices as part of your hour a week, and check whether the business tools you’re using could help you.
For example, your accounting software may let you include a link allowing your client to pay you online or allow you to create recurring invoices and set up automatic reminder emails to chase your late paying customers – which could speed up your invoicing and help you get paid faster.
Make your systems do the work for you
While we’re on the subject of tools to help make life easier, you may also want to look at whether it’s time to invest in dedicated bookkeeping or accounting software for your business.
Could you benefit from using a cloud system that has automated bank feeds, which pull in your transactions from your online bank account directly into your online accounts, for example? That way, you won’t have to log into your bank account, download a file and manually upload it.
Or, how about one that enables you to file your VAT return or your self-assessment tax return direct with HMRC from within the software? Or one that allows you to give your accountant access to your accounts, so you can collaborate in real time rather than sending spreadsheets back and forward via email, or risk losing important data by sharing Google documents?
Business Bookkeeping may never be your favourite business task, but by making it as simple and as automated as possible, you can at least save yourself the spectre of the looming pile of paperwork to plough through. That should hopefully help rekindle some lost passion you’re your business bookkeeping!
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