The February Finance column from David Butler of Clay Shaw Butler
The first few months of the new year sees many people launching new businesses.
It’s a challenging time . . .
You’ve got to think about that all-important business plan, decide on your trading structure, work out what accounting systems you are going to use and take on board sound financial advice.
If you're just starting up in business, your accountant will have stressed how important it is to stay on top of your record keeping.
Although other elements of your business may seem more pressing, it's essential to set aside enough time each week to ensure that your books are in order - keep putting it off and you'll quickly find that your accounts become unmanageable.
Here are five key ways to take charge of your bookkeeping.
1- With the help of your accountant, create a calendar or spreadsheet of important tax-related dates and place it where it's easily visible. If you have a permanent reminder of key dates you'll have a better overall picture of what needs to be done by when.
2 - Implement a system that ensures you can maintain three sets of records:
Cash book- keep a record of all the transactions into and out of your business account.
Purchase invoices- keep a chronological record of how and when you pay your invoices.
Sales invoices - again, maintain a chronological record of when and who you have invoiced, and when you get paid.
Ask your accountant if he or she can recommend appropriate accounting software for your business. A good piece of software will help you keep on top of all your income and outgoings. However, it's essential that you receive the proper training. A badly used accounting program is much less effective than paper records and files. Either way, a good system will make your accountant's life much easier and keep your costs down. And remember if you do go down the accounting software route, make regular backups of your data.
3 - Keep your personal and business accounts entirely separate. Although you may own your business outright, if you start to use your business account to pay for private items of expenditure your accounts will be much harder to reconcile. In the event of a tax enquiry by HM Revenue & Customs (HMRC) your private bank account will be treated as a business account if you are using it regularly to make payments or bank any sales receipts there.
4 - Depending on the type and complexity of your business, try to be consistent about when you do your books. It's tempting to do them at the end of the day or week, but this is when you're likely to be most tired and potentially make mistakes. Try to do your books in the morning - and remember the more frequently you do your accounts the easier they are to maintain.
5 - Get help and advice whenever you feel things are going astray. It's counterproductive to let your accounts get on top of you as you're more likely to make potentially costly mistakes. If necessary employ a part-time bookkeeper to help you stay on track - it's likely to prove cost effective in the longer term.
Keeping up-to-date accurate records and regularly reconciling your accounts is your responsibility. As well as making your life easier when it comes to your year end, good record keeping will also provide important financial information that will help you run your business more efficiently.
Here at Clay Shaw Butler, we are fully accredited Sage Business Partners.
As such we can :
- Provide Sage software;
- Install that software;
- Provide bespoke training packages for you and your workforce;
- Assist you with problems and queries;
- Our team will ensure that your team get the maximum out of the software!
Timely, accurate, Management Accounts are also essential to running any business by assisting the reader in the decision making process.
The Sage Accounts packages will also hold your customer and supplier details, log communications with them including phone calls, letters and emails and can link to your MS Outlook diary ensuring that important tasks and other duties are not overlooked.
You can find out more about money matters on the new-look Clay Shaw Butler website (under or news for business section) -
http://www.clayshawbutler.com/news/latest-news-for-business
At Clay Shaw Butler, we have a very defined mission for 2015.
It goes something like this . . .
We have a strong and experienced team with great local knowledge all geared-up to helping you get the very best from your finances – whether that is as an individual or as a business.
We stay ahead of the game by putting great store by continual professional development for our staff.
Our director Mark Jones is now a chartered tax advisor and team member Trina Griffiths has just successfully completed her Chartered Certified ACA exams.
With Investors In People status at Clay Shaw Butler, we care passionately about making sure our staff have all the tools they need to serve you, our customers.
Weblink -http://www.clayshawbutler.com
The team at Clay Shaw Butler can be contacted on 01267 228500.
The team at Clay Shaw Butler are on Twitter. Look for @clayshawbutler.
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