Keep on top of your business finances, not only will this ensure you are stress free it will also help your business flourish! By following the tips below, you will come to have a better understanding of your business cash flow, fewer issues with missing deadlines and more of an opportunity to grow.
Separate your personal and business expenses. We highly encourage all our clients to have a separate business bank account. If this is not a possibility or if this is not the case at the moment, keep your business-related receipts separate so when it comes to the end of the month you can give your bookkeeper details of your business expenses.
Keep all of your receipts and invoices
Don’t throw anything away! Keep all your receipts and invoices and give them to your bookkeeper each month. This will help them reconcile your accounts ensuring your bookkeeping is accurate and complete. Make it a monthly habit to send your receipts and invoices over each month. This process can be digitalised so don’t forget to speak to your bookkeeper about their methods of receiving documentation.
Drive around in a car or van all day? Why not keep a plastic folder/wallet in your vehicle to pop your receipts in there straight away so they don’t get misplaced.
The eye is in the detail
Details are key! Use clear and precise descriptions and references on your payments, don’t keep them the same! This helps your bookkeeper work out what bills you have paid when completing your bank reconciliation. If necessary, why not send a remittance that shows all invoices included within a payment?
This also applies to invoices. Make sure you use a new invoice number for every invoice sent as this will help differentiate between them. If you use a software, this will be automatic, and most will not let you use the same number.
Make time
Set time aside each month to check your income and outgoings and ensure you have invoice and receipt copies to back these up. Not sure if something is correct? Ask your bookkeeper to assist. If you can set aside a small amount of time each week to cast an eye over your accounts this will ensure nothing goes unnoticed and you stay on top of your finances on a regular basis. There is nothing worse than realising you have a month or even an entire year to catch up on. To help you remember and make the time, schedule the reoccurring day in your diary for every month/week.
It’s not a must but it can make everyone’s life a little easier and can also keep your bookkeeping fees down each month due to the automations! Here at Perfect Balance Bookkeeping, Xero is our software of choice but there are many other accounts software available. Accounting software allows you to create and send invoices, track payments, set rules, set up automatic bank feeds and submit your VAT returns online (which complies with MTD (Making Tax Digital)). As well as keeping all your finances in one place there are also add-ons and external applications that are available to upload invoices and receipts digitally. Xero have a sister application called Hubdoc that allows you to upload receipts via drag and drop, email or take photos via the app. We then enter the information onto Xero from there. This eliminates the need to print and post your documents and as these attachments are also kept within your software you no longer need to keep paper copies!
Set reminders for important deadlines
To avoid missing important deadlines that could result in a fine or missing payments meaning an unimpressed supplier, set reminders for yourself. With today’s technology this is easy to do. Set a reminder on your email calendar, your mobile phone or if you have one, with your very own personal voice assistant such as Amazon Alexa or Google home. If you prefer to use the old school approach, write the deadlines on post-it notes and pop them in a place where you regularly look or add them to your physical calendar.
Record cash payments
If you receive cash as payment, remember to record it. It’s easy to forget about payments made in cash or very tempting to pay for supplies with the cash but this could cause a lot of confusion for your bookkeeper/bookkeeping system.
If you are unsure of how to manage the details of a cash payment on your accounting software speak to your dedicated bookkeeper. If you do not have one and would like a little support, call us. We have a wonderful team here at Perfect Balance and would be more than happy to answer any bookkeeping queries you may have.
