Bookkeeping for businesses – get your books in order for 2010

How do you ensure that you have accurate accounting records? Lisa Newton, author of ‘Bookkeeping Made Simple’, gives us some useful advice.

The key is to be organised. And there is no better time – a new year, and a new start. Don’t allow yourself to be caught out. It’s vital that you know where things are, and that you can put your hands on the files and paperwork that you need. There is nothing more frustrating when you lose or misplace paperwork. Its ineffective. You are the business owner, and you need to be thinking about precision.

1. Buy yourself some folders, pens, stationery, an in-tray

Really go to town. Get a folder for all the things you need. And get folders for all the things that never really seem to have a place anywhere. Call that folder ‘everything else’. As a minimum you should get 5 folders. Colour co-ordinate them if it makes you feel better. But having a filing system of some sort, will help you mentally.

i. Folder for all your sales invoices

ii. Folder for all your paid bills

iii. Folder for all your unpaid bills

iv. Folder for all your bank statements

v. Folder for all your vat returns (copies of), wages (if you have staff), corporation tax returns (annual) – tax stuff

The whole idea is that instead of being buried under a pile of paperwork, you actually have an organised office. And whether you are working from home, or in an office space – get a shelf, or a space, where all files relating to the accounts department can live.

2. Go through your in-tray and promise to file it, bin it or deal with it.

Preferably, you’ll go through your in-tray ‘once a week’ and deal with each piece of paper e.g. pay it or enter it onto your system – and then you should file it into one of your folders… never to be seen again. What you don’t want is to be pushing bits of paper from A to B to C and back to A again. As the pile grows, you can’t find what you need. I’ve done it. I’m sure you’ve done it (or seen someone else doing it). The bookkeeping is one of those tasks that people love to put off, but you cannot and should not just allow it to mount up and take over your desk. Collect things in, put them in the in tray and then deal with and file them away in a timely manner. I promise you, you will feel better for it.

3. Get appropriate accounts software and learn how to use it.

Believe it or not, computers are supposed to make our lives easier. Not many people will think to pick up a pen to write a letter – they prefer to type it up in word. In the same manner, with so many things being computerised, it would help you a lot, if you invested in a good accounts software, and learned how to use it properly. This could take a day, or a few days… but the time / cost benefit it would have, would be enormous. Some people still get by using an excel spreadsheet. And although spreadsheets weren’t made for the purpose of accounting specifically, they’re still better than nothing.

4. Send out statements & invoices regularly – by email (and post if you want to).

Remember, that paying your bill might not be on the top of someone else’s ‘to do’ list. And what we have to try and remember, is that if you are buried under paperwork, they might be swamped too. This is particularly relevant when you are a business, dealing with business clients. So, always try and make the other persons life easier. Send out your invoices promptly. Delaying them, is not only delaying your payment but also increasing the chances of them querying it. If an invoice is received 2 months after the work was done, they might assume that either a) they’ve already paid it because its so old or b) they’ve already had it. Either way, avoid these unnecessary delays, by invoicing promptly. And if they owe you more than one invoice, a statement helps to job their memory. They might only pay the most recent invoice not realising that there was one previously (but its been lost in their pile somewhere).

5. Put the VAT Return dates in your 2010 diary right now!

The VAT creeps up on us quicker than we realise. We need to put in those dates into our diary. Don’t rely on a green form to remind you. They might be phasing them out soon, as they go towards getting people to move online. Plus, if you have a pile of paperwork – it could get lost within it. So, use your outlook calendar, or traditional pen and paper diary – whatever works. And keep on top of filing dates.

6. And finally… if all of the above sound like just ‘too much work’ – get in a good bookkeeper!

I have to give it a plug. Bookkeepers are unlike accountants. They charge less. But the work they do it just as valuable. If doing all of the paperwork is not what you are best at, or its not what you want to be doing… then pass it to someone who’ll absolutely love it, and who will go through your in-tray with relish.

For more information, grab yourself a copy of ‘Bookkeeping Made Simple’ by Lisa Newton, which is available on amazon, in the e-shop boogles.biz and for immediate download from lulu.com

FREE cash flow report – download your copy here!

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