If you are a UK small business owner the you are normally far to busy to be spending time on maintaining your businesses books and records, you have with out doubt got a 101 things to do! You have to consider HR, admin, health & safety, site management etc., whilst trying to make a living and maintaining a healthy work/life balance! So when have you got time for writing up your books, sorting out your VAT or running your payroll? However, keeping up to date books and records is very important for a number of reasons some of which are outlined below:
(1) It is a legal requirement – you must have an accurate record of your business income and expenditure.
(2) There are penalties for late submission of VAT returns, and Payroll forms.
(3) There are penalties for late submission of tax returns.
(4) How can you manage a business without knowing how you have been doing.
(5) If your books are not up to date you have less chance of noticing if someone has been stealing from you.
(6) You should regularly update you records in order to timely chase debts that are overdue to you.
(7) To avoid making overpayments you should check suppliers statements to your records.
(8) More business fail through cash flow problems than poor profitability. How do you know what your cash flow situation is if your records are not up to date?
You probably already new that it was important to keep your books up to date, but that does not solve the problem of finding the time to do it! So here are are number of tips that may help you:
(1) Try to get into a regular routine, when you set aside some time, at the same time every week to update your books. If it is a habit then it is a lot easier to do. Also the prospect of writing up a weeks books is a lot less daunting than writing up a month, a quarter or even a year! Plus you are also more likely to remember what things are if you update them straight away.
(2) Become organised with your paperwork. When you receive a bank statement or delivery note, carefully file them away. People often spend to much time hunting for lost paperwork!
(3) If you use an accountant, then give them the books and records as soon as possible after you accounting period end. If they have any queries with your records you are more likely to remember them and if there is any paperwork missing you have chance to obtain copies and still meet filing deadlines.
(4) Don’t over complicate things! Use a book keeping system suitable for your business size. A good accountant should be able to help you with this. If you don’t like computers then a manual system is fine. If you are using a computerised system then perhaps you don’t need the most complicated version.
(5) Ask your accountant about book keeping methods that could save you time. For instance, there is now book keeping software that will allow you to import bank statements directly into it, which will potentially save a lot of processing time.
(6) Consider outsourcing your books to a book-keeper or accountant. Often the time you spend doing your books and records could be better spent earning more money! Or perhaps you have fines in the past and the cost of the book-keeper will balance out the cost of fines.
(7) If using a computer ensure that it is regularly backed up. There is little worse than having to re-enter data that you have already entered!
Harries Watkins Jones, South Wales Chartered Accountants with offices in Bridged and Pontificated.
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