Bookkeeping and accounting can be an overwhelming task even for experienced business owners; however there are a couple of straightforward strategies that can keep your finances in working order. Here is a list of some of the most helpful accounting tips for your small business.
Keeping all your Records and Receipts in order
If you don’t keep your records and receipts you could miss out on valuable tax deductions on expenses or you could end up understating your income which could lead to potential fines and penalties.
A solution to help with this is to make use of one of the number of cloud accounting packages that allow you to track and submit your expenses on the go from your mobile or tablet. Another benefit of cloud accounting packages is that you can store all your receipts and bills online so there is no risk of losing them. Or you can still record your records on excel or use a desktop accounting package to help track your transactions. HMRC requires you to keep them for 6 years. Once all of all of your transactions are on a cloud accounting package they can be reconciled and categorized.
By keeping good records of your business you can ensure you get paid by all of your customers which is very important for small businesses with limited cash reserves.
Start early and keep on top of your records
If you start early and keep on top of your records you will save a lot of time and stress. As mentioned above, cloud accounting software can help with this but you have to keep updating your records in order to stay ahead.
Forms and Deadlines
Most small businesses have at least two deadlines, One for filling out tax returns; the other for paying the associated tax bill. If your business turn over exceeds £85,000 your business will most likely have VAT returns to file as well. However the payment of liability can be set up as a direct debit straight from your business bank account.
Furthermore, if you have a limited company your company will have to file its annual accounts with companies’ house and HMRC. Should you miss any of these deadlines, Penalties can build up quickly. On top of that, if you are an employer you also have to file payroll RTI (Real time information) returns each time you pay your staff.
An accountant can help ensure you meet those deadlines and perhaps help your business to save tax and grow its turnover on profits.