6 Essential Bookkeeping Tips for Small Businesses

Bookkeeping is usually a dreaded task for small business owners. Most entrepreneurs are creative and skilled in their niche, but accounting isn’t something many are taught to do well. If you feel overwhelmed by bookkeeping tasks in your small business in Alcester, our professional accountants will give you six of their top tips to make it less stressful.

Don’t Mix Business with Pleasure

The biggest rule in bookkeeping is to separate your business accounts from your personal ones. If you currently have money from your business going in and out of the same account as your household bills, tax returns will be much harder than they need to be.

Set up separate checking and savings accounts for your business so you can keep your revenue separate.

Track Every Payment

You should also record every single payment that comes into your business, including when they were made and how much you received. This will save you so much time later when you’re trying to search through old invoices.

This is much easier to do if you use online accounting software, which we’ll talk about later.

Forecast Your Cashflow

It pays to be on time with your payments to HMRC. Late payments incur hefty fees, which no small business wants. To ensure you’re up to date, forecast your cash flow a full twelve months in advance. This way, you can predict how much money you have coming in and can give your clients enough time to make payments.

If you have clients that are consistently late with payments, it might be time to think about letting them go and finding more reliable alternatives.

Use your books to track every payment and record when they were made or when the payment was received. This will save you a wealth of time trying to find them if you need to refer to them at a later stage.

Use Accounting Software

We know it takes time and effort to set up online accounting software, but it will save you so much time on bookkeeping. A cloud-based system means you can scan receipts, send invoices automatically, take care of payroll, and track your finances, all from one dashboard.

As accountants that specialise in small businesses, we set up cloud-based accounting for our new clients, saving them the hassle of doing it themselves.

Keep Track of Spending

There are plenty of business expenses you can claim back, but you need receipts and records of all payments to validate your claims from HMRC. Keep a record of all of your purchases and store both physical and digital receipts somewhere safe. If you can, keep your receipts organised into different categories to make it even easier should you get audited.

Know When to Hire a Bookkeeper

As a new business, it’s manageable to handle bookkeeping tasks yourself. But as you grow, you’ll probably find yourself needing professional help. If you’re spending hours on your books every week or month, you’ll save time and money by hiring a professional bookkeeper in Alcester.

At The Ledger House Accountancy, we specialise in bookkeeping for small businesses. We’ll take care of everything from tracking expenses to filing your tax returns, so you can spend your time focused on your customers. Call us for a free consultation:  01789 507 273