Alex Burnett’s talk at our March 2017 meeting was a timely reminder of the benefits of keeping paperwork up to date. She also gave us some very useful tips on how to improve our bookkeeping.
Paperwork is not something most people enjoy but it is vital to keep our business running, as well as for completing the tax returns that we need to submit. If we don’t invoice our customers quickly and accurately, we will soon run out of money. Recording our spending, controlling our stock & assets and managing our cash are also essential to keep our business out of trouble.
BENEFITS OF UP-TO-DATE PAPERWORK
Getting into a routine of doing paperwork regularly, rather than leaving it until just before some deadline, brings many benefits.
- Noting down costs soon after incurring them means you are much less likely to forget expenses that you can claim for
- Keeping up to date means you can see your financial status at any time and avoid unexpected cashflow or profit problems
- Prompt, clear, accurate invoicing cuts down problems with clients paying. Good payers will be able to pay on time and it will be easier to chase poor payers
Alex gave a number of tips and others were shared in the discussion that followed:
- Send electronic invoices as pdf files cut down the risk that they are altered or cannot be read
- Always put payment terms and bank details (for payment by bank transfer) on your invoices
- Include your terms and conditions with proposals or quotes so that customers are agreeing to them when they accept your proposal
- File receipts regularly, e.g. have a monthly file, and make sure you note what they relate to so that you, or your bookkeeper, can categorise them properly
- Don’t mix business and personal accounts – it leads to confusion, lack of control and more work later
- Use an app such as Milebug or Tripcatcher to record your business mileage more easily. Or, if you prefer, keep a simple paper form in the car. Build the habit of noting mileage at the end of each trip.
- Allocate regular (weekly) time to keep paperwork up to date
- Use cloud accounting for easy input and management. Good cloud services offer automatic links to bank accounts and VAT submission, transaction matching, intelligent categorisation of expenses based on previous work, the ability for you and your accountant to view the same information and up to date views of your finances. Alex is a certified advisor for Xero, a leading cloud accounting package, and can give you more information and special offers
TOO BUSY FOR BOOKKEEPING?
If you would make more money by spending your time selling, providing your services or making your products, then you can always outsource your bookkeeping to a company like Alex Burnett’s AB Bookkeeping Ltd.
But remember bookkeepers are not mind readers. You still have to do some minimal paperwork to give them your receipts and other relevant paperwork regularly and to include enough information to show what each item relates to. Otherwise you will be spending more time answering their questions.