In all likelihood, you probably don’t consider filing and pen-pushing a personal hobby. Even our small business accountants in Milton Keynes don’t dream in neatly ordered patterns (despite what people would have you believe). But, the fact still remains that bookkeeping is here to stay. So how do we learn to make it more manageable?
When completed on a regular basis, bookkeeping tasks can help small business owners become more confident in their business approach. While there’s a tendency to let bookkeeping tasks slide in favour of more pressing matters, leaving them to the last minute can often lead to complacency. In no time at all, the paperwork will begin to pile up and you’ll find yourself working later and later hours in order to stay ahead.
The key is to break bookkeeping down into monthly instalments. Here are five tasks you should be completing during every thirty-day cycle to achieve this goal.
This one is simple. Keeping track of all your comings and goings will help you predict patterns in your finances and help you decide if and when you need to start budgeting. While you could do all the donkey work yourself, a cloud-based accounting system will automate the whole process for you.
By monitoring your expenses and income, an online bookkeeping service can provide you with all the financial information you need. If you’re in any doubt over how to install or operate your cloud-based system, enlist the expertise of a Milton Keynes accountant to help show you the ropes and to collaborate with you on important tasks.
Again, relatively simple (you’ll notice a trend here). Checking your bank balance on a regular basis can be one of the easiest ways to determine the financial health of your small business. Log into your account once or twice a month and take a quick look at the cash that is incoming and outgoing. If you’re spending more than you’re earning, you’ll be able to spot the root cause immediately. This saves you the bother of trawling back through bank statements later on.
It’s incredible how many times a small business accountant will learn that their client has no clue how much profit their company is generating. For many businesses, a monthly or even weekly revenue check is second nature and it pays to be vigilant when it comes to your profit margins.
Not only is it nice to know your small business is prospering; knowing exactly how much your business is making is vital for tax purposes. At the end of the tax year, your self-assessment tax return needs to completed with an accurate representation of all company profits. Even if you are freelancing, self-assessment tax returns are still mandatory. The clearer the records you keep, the easier it will be to avoid mistakes in calculation.
When the end of the tax year rolls around, having a record of business expenses can be vital to claiming back every possible penny. Small business receipts hold all the information you need to complete your tax returns in Milton Keynes and should be stored accordingly.
Nowadays, you have two choices when it comes to receipt storage. You can either keep the paper copies on file in your desk drawer, or you can digitally scan them into an online bookkeeping service. Whichever method you choose, it’s important that you check your receipts against your bank statements once or twice a month, to ensure that there are no discrepancies.
During the course of the month, it can be easy to forget about the immediate future. But, planning ahead can save you a lot of time and trouble. A quick monthly performance review can give you a strong indication of your finances going forward, even if your income is fairly irregular.
In fact, going over your accounts with a Milton Keynes accountant can help you prepare for any inconsistencies. Simple tasks, such as checking over your profit and loss statements, creating income and expense reports, and calculating income projections, will all stand you in good stead for the weeks ahead. A Milton Keynes accountant will ensure you’re up to date and in a strong financial position going forward.