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Bookkeeping is a vital part of doing business accounts.
If you can stay on top of your figures, it makes filing your final tax application and assessing your finances much easier.
But good bookkeeping is far from simple.
There are many ways people can make mistakes that could end up being costly.
Here at Blue Rocket Accounting, we know the importance of good bookkeeping, and that’s why we’ve compiled this list often bookkeeping tips to help you succeed in your process.
Let’s take a look.
Bookkeeping Tips to Boost Your Business
Keep Separate Accounts
One of the key components of good bookkeeping is keeping things simple when you can.
Simplicity helps to make bookkeeping accurate and efficient, and therefore it is never a good idea to mix business with pleasure when it comes to your finances.
Having a separate account for your personal and your business use means the numbers don’t get mixed up and you can clearly see how your business is performing and how much you have in personal savings.
This means nothing gets filed in the wrong category and nothing gets spent which shouldn’t do.
Look to Automate Where Possible
Automation is a great way of making bookkeeping quicker and more precise.
There is some great software available that can take control of many aspects of your bookkeeping and will reduce the chance of human error and the time it takes to do so drastically.
This will also mean that your data is always up to date and new transaction information is uploaded in real-time, which helps you to always stay on top of your finances and avoid laborious tasks such as manual data entry which if left for a few weeks, could take days to complete.
Keep up to date with Financial Regulations
Business finances are no joke, and understanding your tax responsibilities and deadlines is vital to ensure you don’t get penalised.
Good bookkeeping isn’t just about making sure your information is correct, but it also involves staying on top of any changes that will affect how your figures are presented at the end of the financial year.
By knowing your regulations, you will know what to file as business expenses and what not to, and this can end up saving you money as well as ensuring your financial figures are right.
It’s also always a good idea to keep educating yourself on best practises and technologies that could help streamline your bookkeeping as this could lead to a better system in the future.
Track Every Transaction
If there is a mantra that deserves repeating on the topic of bookkeeping it should be this one.
Track every transaction.
It doesn’t matter how big or small, everything your business makes and spends should be recorded down so it can be used as part of your financial reports and applications.
From sales and purchases to expenses and payments, every transaction counts and if you can stay on top of them and ensure every one is recorded down in an efficient manner, you’re on the way to great bookkeeping.
You can use specialist accounting software or even a good old ledger to mark everything down, with the date, the item in question, and the finances involved.
Create a Process
One thing that can really help when it comes to good bookkeeping is creating a process.
Bookkeeping can be as hard as you make it, and if you establish a way of working that is streamlined and efficient, then this will be a big help in the long run as you grab hold of your finances.
This can involve many aspects of your accounting.
For example, if you create a systematic way of storing invoice details and ensure all information is kept in the same place, before long you will be able to do this without thinking and really master the process.
By building a process and sticking to it, your bookkeeping will just become a simple part of the day and won’t feel like a chore at all.
Keep Checking Your Reports
A great benefit of bookkeeping is that you can make the most of the information provided.
With an overview of your finances available, it is easy to really assess your business’s financial performance and standing.
Reports such as income statements, cash flow reports, and balance sheets are great ways of stepping back and seeing how your business is really performing.
You can then use this information to make informed decisions on how best to progress and be able to forecast future earnings.
You can also produce management accounts which are great ways of internally viewing your finances and assessing your business position.
Don’t Throw Away Your Receipts
A good tip in bookkeeping and in general life is to always keep your receipts.
You never know when something may be needed. If there are any discrepancies and you need to prove anything, then having the receipts handy is always a big help.
And this applies to other documents as well, such as invoices. These documents are evidence of a transaction taking place and have all the information needed to answer any enquiries quickly and correctly, so having them to hand is always a good idea.
They are vital for tax purposes and audits, so make sure you have a good filing system which allows you to quickly find them when needed.
Compare Statements
Finances are tricky.
With lots of different calculations that may end up making figures incorrect if inputted wrong, you may find that your statements don’t always match up with your final figure.
This is an issue, and any errors need to be ironed out quickly so that you can get your finances correct again.
If you can prove that all of your records are aligned with your bank statements and transaction documents then you can rest assured that if anything was questioned, you have the proof to back up your figures.
Keep Back Ups of Your Data
Something that is vital but is often forgotten is to always back up your data.
You don’t want to lose months of financial data due to one error as this could cost your business weeks of work getting things back on track.
Making sure your data is backed up regularly protects it from problems such as this, and whether you’re using cloud storage or hard drives, in the worst-case scenario you will still be able to see your figures.
This is something that may only take a few seconds to do but could make a huge difference to your bookkeeping performance.
Ask a Professional to Help
Finally, we’ve mentioned throughout this blog that bookkeeping isn’t easy, and that’s because it’s true.
There are many elements to a good bookkeeping process, and not everyone has the time and equipment to handle it.
If this sounds like you, then the best choice is to consult a professional. An accountant will be able to take control of your finances and ensure that your bookkeeping is always up-to-date and correct.
They will also assist with complex transactions, tax planning, and even provide valuable advice for your business.
If you’re feeling overwhelmed or mistakes are being made, this is a great way of fixing all of your problems with one quick decision.
Bookkeeping with Blue Rocket Accounting
If you do decide to outsource your bookkeeping, then why not work with Blue Rocket Accounting.
Our team of experienced accountants will take control of your finances and help push your business in the right direction.
Want to know more? Then get in touch today.
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