Anyone who’s tried home working knows about the dual pleasure and pain aspects. Yes, you get more freedom to do things your own way, but there’s the downside of more responsibility and not necessarily anyone to share it with.
For some, bookkeeping is one of the main pain points. You can’t escape filing a tax return or the need to keep accurate records. If you’re one of those who find it a challenge to keep your records straight, here are some tips to make it easier and show the benefits as well.
Have a Business Bank Account?
Opening a business bank account isn’t any harder than opening a personal account if you don’t want to borrow money or have an overdraft. Many banks also offer free banking for the first year or longer. Plus, a business account gives you a more professional appearance with your customers.
With a dedicated business account, you remove all chances of blurring the lines between personal and professional spending and income, and this makes bookkeeping much easier. Sifting through personal transactions to weed out business ones is a huge time waster when you’re updating business records.
Control Your Receipts
In business finances, you need to track everything. The easiest way of staying up to date with expenses is by having a system for your receipts so they don’t get lost or hopelessly muddled.
- You can scan or photograph them and keep digital copies instead of paper ones. HMRC will accept these in most instances, but check before destroying paper docs just in case. Record both sides of the receipt, and keep the digital file safe either online or in local storage on a back-up drive. Remember to name the file in a way you’ll remember.
- For paper receipts, number them yourself so you don’t have to search for and record the long numbers some companies use. The numbering system doesn’t matter as long as you can easily find the corresponding entry in your account books.
- Unless you generate a lot of receipts, one way of keeping them organised is to staple each one into a cardboard folder (or onto a sheet of paper). This keeps them together by week or month and prevents odd ones getting lost.
Know Your Limitations
Not everyone is comfortable with figures or relishes totting up columns of numbers. Another factor is time, especially when your business is home based and you’re juggling family commitments as well as those for business.
Accountants and bookkeepers are there to take the strain. You can hire bookkeeping services for as much time as you need, even if it’s just an hour or so each week. Many bookkeepers work with multiple clients and divide their time accordingly. These helpful people will make sure your books stay healthy through the year so they’re up to date and ready when the annual tax return rolls round.
Accountants can be worth their weight in gold if you find digging out the relevant information demanded by HMRC challenging. They’ll take the books your bookkeeper prepared and do the digging for you, compiling and submitting the return on your behalf. They’re also able to spot areas where the business could be more profitable, or where you could do things a little differently for better results. Heeding business advice from an accountant can end up saving you thousands.
The number of home workers grows every day, and many of those are running their own businesses. Bookkeeping can seem like something that gets in the way of profitable activities, but actually it’s one of the things that can really help, and it doesn’t have to be complex or too time consuming.
This is a sponsored post guest post for Braant Accounting.