Are you tempted to duck under the bedclothes on the night of October 31st and try and shut out the “Ghosties and ghoulies and lang-legged beasties and things that go bump in the night”?
Is your business bookkeeping also something you try and hide away at the back of your mind and forget about?
Emily Coltman, ACA, Chief Accountant at online accounting provider, FreeAgent, gives her five top tips to help you lose your fear of bookkeeping.
1) Do it regularly and it won’t seem so scary
If you leave your bookkeeping until the last minute – say, when your VAT return or your tax return is due – then you will be running around as though pursued by a ghost, trying to collect all your information and put it together in a short space of time, even through the night.
Try and do a little every week or every month, depending on how big and how busy your business is.
2) See it as a means to an end
There’s a story of three men who were cutting stone by a roadside, and a passing traveler asked them what they were doing.
The first man, who looked exhausted and furious, said, “I’m cutting stone.”
The second, who looked tired but calm, said, “I’m cutting stone to make money to feed my family.”
The third man smiled delightedly and said, “I’m building a cathedral.”
Think of your bookkeeping as helping you build a successful business, rather than a monotonous chore.
3) Gain useful information about your business
There’s a wealth of useful information that your books can give you if they’re kept up to date and accurate, use this as a motivation for keeping them in good shape.
Are you charging your customers enough to make a good profit? Should you be giving so much discount? Are your customers paying you quickly enough to let you pay your suppliers in good time?
Your books can tell you all that and more.
4) Keep on the right side of HM Revenue & Customs
HM Revenue & Customs (HMRC) have the power to inspect any business’s records, even if they don’t think you’ve done anything wrong.
It’s always better to work with HMRC rather than against them. They’re not the demon king. Honest. You may need to ask them for help or advice one day, and they’re not going away any time soon, so try not to upset them.
And if you are inspected, tidy records will make the process much smoother and win their goodwill.
5) Improve your relationship with your accountant
Someone else who likes tidy records is your accountant.
If your accountant has to spend ages sorting out a bundle of messy paperwork, they’ll get tired and cross, your bill from them will be much larger than it needs to be, and they won’t have time to provide advice that will really add value to your business, such as helping you pay less tax.
So it really is a good idea not to be scared of your books. Use a straightforward accounting system to keep them in order and banish that ghost.
About the Author
Emily Coltman ACA is Chief Accountant at FreeAgent who provide an online accounting system specifically designed to meet the needs of freelancers and small businesses. You can try it for free at www.freeagent.com.