Paperwork. It’s such an important part of your business. And when that paperwork is related to accounting, tax and payroll it’s enough to strike fear into the heart of any business owner.
The reason is fear of the unknown. Many business owners simply do not know enough about that side of their business. In this case, ignorance is not bliss. In fact, ignorance will simply cost you money.
Here are 4 ways to ensure your paperwork is up to date and your accounting does not develop into a big, scary (hairy) monster.
Opening a company bank account when you first start out can often be considered expensive. And that may be true. However, if you don’t use a separate account, especially if you are a sole trader, your accounting can become troublesome. This is because both business and personal expenses are jumbled together. Separating these can be a gruelling job. Best keep them separate.
Invoices are critical
Invoicing a client is critical for your business to run. Without invoices, you are not going to get paid. No one asks you for an invoice! Get the invoices to the client ASAP. This is seen as a sign of professionalism on your behalf. Receiving an invoice soon after the service or product is received reduces any queries you may get if they receive it after a week, for example.
After the invoices are issued, track the payments regularly. If you are issuing many invoices, track this daily. Keep track of who has and has not paid. If this is not kept under control, it can result in a cash flow problem very quickly.
Disappearing money syndrome
As much as invoices are critical, tracking your expenses is critical too. We all feel that money has a tendency of disappearing faster than it appears! Keeping tabs on what it is being spent on is a way of making sense of that disappearing act. It makes you aware of spending the money. This can even slow down the disappearing money syndrome because you are making a conscious decision to spend.
Use an accounting system
An accurate system is imperative to a solid financial structure for any business. This system will make the above points seemingly effortless. When you are choosing a system, always take into account your requirements. All companies will need certain functions: invoicing, expense recording and a bank module. This will always ensure your information is complete and accurate.
Your requirements may change depending on the nature of your business. For example, if you run a service business you will not need a system with a stock control module. This system does not have to cost an arm and a leg, there are some great free or close to free options
They may seem basic but these four small things can change the way you do business and can make ensure that your business is still open for business in many years’ time.
This blog post was updated on the 29th July 2020
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