Bookkeeping is a vital part of your business’ operations. However, if left unattended, it has the potential to get widely out of control, which can cause major headaches and potentially cost your business a lot of money when it comes to tax time.
Here are our top tips to help you maintain clean and up-to-date books:
Keep everything up to date
Have you ever found yourself scrambling to get your books in order the day before your taxes are due? That last minute scramble to organise your books, find the receipt and categorise the invoices is all too common.
In order to avoid this, we highly recommend you make time each week to review your records. Your accountant will love you for it!
Not only will this make it easier when the taxman comes calling, it will also help you keep on top of your financial position throughout the year.
Keep your records clean
Another good reason to regularly make time to review your books is that it will help you keep them as clean as possible. There is nothing worse than trying to review your financial records only to find you’re missing all of March’s invoices and you can’t find the receipt for the company car.
Keeping your books clean is also vital to ensuring you stay compliment to all legal requirements. Inland Revenue requires businesses to keep up to date and accurate records for seven years. This includes records of all financial transactions your business has been a part of, such as bank statements, invoices, bills and receipts. On top of that, if you have employees, you’ll also need to keep your payroll records.
When your records are up to date and as clean as possible, you will reduce error which can be extremely costly for your business.
Don’t mix your accounts
This is easier said than done and in reality, it’s never that simple. However, it’s important you try and keep your personal and business accounts separate. Here’s why:
Firstly, it’s a lot easier to keep track of your transactions when everything is separate, saving you a lot of time and stress when you need to get your books in order.
Secondly, keeping your business account separate will reduce your personal liability if the company is ever in any legal or financial trouble. If you regularly mix your accounts, you may be opening the door for Inland Revenue to investigate your personal affairs if your business is being investigated.
The simple way to do this is to not pay for any personal expenses with your business account and vice versa.
Stay on top of your cash flow
Make sure you stay on top of your business’ cash flow. The best way to do this is by sending out all invoices on time and monitoring your income and expenses.
Cash flow is the lifeblood of your business. It’s extremely hard to get an accurate picture of your financial position if you have inaccurate cash flow figures.
Did you know, CashManager has a great feature that allows you to keep full visibility over your business’ cash flow? Our user-friendly software simplifies the accounting process, allowing you to accurately manage your cash flow and finances.
Invest in technology
With the raft of options available, it has never been easier to implement a platform that will allow you to effectively manage your accounts.
CashManager is perfect for businesses of all sizes. With its abundance of features and easy to navigate interface, our platform is the smartest accounting software on the market. With the ability to adapt it to your requirements, CashManager will be your best weapon in the fight to keep your books clean.