If you are a small business owner you will know that there never seem to be enough hours in the day. There are always a thousand jobs to be fitted in, and accounts are often the last thing that you want to worry about.
Accounts take up time that you need for other things, and they don’t bring in any extra income to keep you employed.
Why Are You Delaying Your Accounting?
The desire to concentrate on activities that generate income is one of the chief reasons that many small business owners tend to get behind with their book-keeping. Another reason that record keeping is seen as a much lower priority by many is that they struggle with it the practicalities of accounting. Accounts are seen as complicated and difficult, in their world balancing the books is something to be put off for as long as possible.
It really doesn’t have to be this way at all. There are many ways of simplifying your accounting nightmares, and helping you keep your books up to date.
Keep Track of Your Income
Knowing who has paid you, how much they paid, and when they paid you is essential to maintain your business properly. It’s a good idea to either retain hard copies of your receipts if you are paid by cheque, or credit card, or to digitise the receipts so that you have a copy of them. These copies of your financial transactions can provide valuable proof if there is any problem with a payment, or if a customer disputes a charge in the future.
These physical records are essential for your own protection, but most of your day-to-day accounting will usually be done using a dedicated computerised system. Using a dedicated accounting system makes it simple to see what your income is, as well as to calculate how much tax you owe. Ideally you should set up your computer system so that it mirrors your paper system, so you can easily find the record you need on either system.
Know Your Expenses
It is vital to know where your money is going, or your business will soon run into trouble. The ability to easily locate any record is vital. This doesn’t mean that you must use a particular system or keep your records in a certain way. Every business is different. You may choose to file everything by month, or by type of expense; marketing, travel, admin etc. The categories you choose don’t matter as long as you can find what you need without looking through your entire system.
Keeping Your Accounts in Order Saves Time and Money
Keeping a computerised record of all your business records is the simplest way to make sure that you get your tax right. It is much easier to know what your tax bill is going to be if you keep your records up to date and have your accounts in order.
Once you have your accounts in order, managing them on an ongoing basis should take no more than a few minutes of your time each week. In the future you can forget about spending hours hunting for lost receipts, or missing invoices, or trying to work out who has paid you, and who you should be chasing for payment.
You might think that you don’t have time to do your accounts, but taking proper care of your accounts is the best way to ensure that your business keeps on growing. With up-to-date accounts you can have a clear idea of the direction your business is travelling, and with the time you save now you are not hunting for paperwork you can spend more time actually running your business.