6 Tips to Make Your Bookkeeping A Breeze - Say Goodbye to Stress!
Do you like bookkeeping? I personally hate it! It's a thorn in my flesh. But there are ways to make it easier. Let's take a look at how!
Keeping track of your company's cash flow and operational spending can seem like a lot of work. But setting up bookkeeping processes from day one can save you from stress and headaches later on. It will also help you stay ahead of tax obligations, reduce potential audit risks, and provide clarity for future growth. Keep reading for tips to make bookkeeping a breeze instead of a burden. These best practices will help you organise, streamline workflows, and keep operational costs in check. Plus, we'll also talk about the benefits of outsourced bookkeeping services.
1. Be Organised
First and foremost, you need to be organised to understand your operational expenses and cash flow clearly. It's essential to have a centralised location for all accounting information. Although some companies keep their finances separate from their bookkeeping, most businesses have a strong link between accounting and bookkeeping. Start by setting up a folder structure to organise your financial information. Create folders for your company's financials, accounting software, taxes, and other financial documents that are relevant to your business. A centralised location for all financial information will make it easier to access when needed.
2. Establish a Constant Repaying Process
When booking job estimates and signing contracts, you need to be mindful of their repayment schedule. This is the best way to keep track of your cash flow and know when to expect payments. You should also create a standardised process for estimating jobs. It will help you be consistent, making it easier to forecast future cash flow.
3. Automate Repetitive Tasks
Some bookkeeping tasks are repetitive and can be automated. For example, you can use a cash flow management tool to automatically create new invoices from emailed or uploaded customer payment details. This will make it easier to manage your cash flow and forecast future payments. It will also help you keep track of outstanding customer balances since there will be a centralised location for all payment details. If you're using accounting software, see if you can set up recurring tasks, such as creating new invoices. You can also add recurring tasks in project management software, such as updating your company's work order list as projects are completed. This will help you be more consistent and organised with your workflows.
4. Outsource Tasks You're Not Good At Or Simply Don't Enjoy
There may be specific operational tasks that you aren't good at or don't enjoy. In this case, it makes sense to outsource them to someone else. For example, outsourcing your bookkeeping can save you time and money. They offer services like monthly bookkeeping, expense categorisation, error-checking, handling bank reconciliations, vat calculations, submitting vat returns, producing reports, checking business costs, invoicing, and chasing up invoices.
If you're outsourcing your bookkeeping, set clear expectations from the outset. This will help ensure you get what you need and the most out of the relationship. In addition, choosing the right time to bring someone new on board is critical to keeping your bookkeeping as efficient as possible. Of course, the best time might be when your business has reached a certain level of productivity and is ready for growth. But when it comes to outsourcing your bookkeeping, it might be as soon as possible!
5. Track Taxable Events
Accounting for tax-related events with precision is key to staying on top of your business's cash flow. For example, submitting your quarterly VAT returns to HMRC. For each of these events, you should set up a process for documenting their occurrence and creating a record for tax purposes. This will help you stay organised and keep track of all the information you'll need for taxes. What events are they? Well, that depends on your business. If you're unsure, talk to an outsourced bookkeeping service, it will save you time and money.
6. Use Contracts To Stay On Top Of Operational Costs & Repaying Processes
You should set up various contracts for each of your operational costs, such as cleaning services, gutter cleaning services, maintenance services for company vehicles, or marketing services. This can help you keep track of operational expenses and the necessary repayments. It will also help you stay organised and make it easier to create financial reports. For example, your cleaning service bill is £500 each month. To keep track of this, you could use the following process:
- Create a cleaning contract with the cleaning service
- Create an operational expense account in your financial software (with details of the monthly cleaning charge)
- Create a monthly bill in your software with the amount owed to the cleaning service
- When the bill is paid, mark it as paid in your software
By following this process, you'll have a centralised location for all information related to the cleaning contract, including the initial contract, monthly bills, and payments. This will help you stay on top of your operational expenses and repayments. You'll also have the information you need for financial reports.
Keeping track of your company's cash flow and operational spending can seem like a lot of work. But if you're not on top of the bookkeeping processes from day one, your company may suffer cash flow problems, fines for late payments and other problems, causing stress and headaches. Keeping your accounting and bookkeeping organised will make understanding your company's cash flow and operational spending easier.
If you're not entirely sure about something, talk to a qualified bookkeeper.