5 tips for good bookkeeping!
Here are some bookkeeping tips that could transform your way of bookkeeping.
Get into a routine
Set time aside so you can concentrate on bookkeeping for your business. We would suggest you do this either once a week or month. And, if Making Tax Digital affects you, then getting into a routine like this will help make the transition to digital tax returns easier. It will also help you to see your income and expenses each month and monitor invoice payments from clients.
Ensure any paperwork is kept safe
Use the latest apps to scan your receipts and invoices. This will help you make the transition to Making Tax Digital and keep all documents in one place, which, will make finding them a lot easier! Online software such as Quickbooks will allow you to view your books from anywhere. One of the great benefits of accounting software is that it allows you to view your books on the go meaning you can benefit from secure, remote data storage.
Keep business and personal bank accounts separate
It is absolutely essential that you keep your private and business accounts separate. If you're a director of a limited company, then you can't spend the company's money for your own purchases, unless they are a business expense. If you're self-employed, you can take money from your business, but you should still have a separate bank account to help balance the books at the end of the month. Keep track of your finances easily by keeping your business and personal finances separate.
Budget for tax
Dealing with tax and paying the tax can sometimes be difficult for small businesses, therefore it's vital to start budgeting. It is easier to budget for tax as you go so that you are more prepared for the end of the tax year. You could open a business savings account and put at least 25-30% aside for your tax bill. The process of budgeting and putting away a dedicated sum for taxes will ease the worrying and stress when the self-assessment deadline approaches.
Use online accounting software
Using good, cloud-based software will save you time and money. Online accounting software can allow you to create invoices, track payments, report VAT and manage stock levels. There are many benefits of online accounting software as it allows you to keep track of all your financial information in one place. Make the switch to digital bookkeeping sooner rather than later
HMRC is planning a total digital switchover which is set to be rolled out from April 2021. For some, this isn't anything new – Making Tax Digital (MTD) has been in the public domain for a good while now.
More and more people are submitting their Self-Assessment tax returns online than ever before, and last year, 89% were submitted online. Many taxpayers are now exploring online solutions for the first time.
Don't delay!
As the 31st January deadline is looming, it's wise to start your self-assessment tax return now – over 513,000 returns were completed on the 29th January last year, totalling more than 21,000 every hour. At this time HMRC's servers and phone lines are hammered and those leaving their submission to the last minute can suffer from a slower, even more stressful experience.
Buckler Spencer can help you get started. Please get in touch for more information.